A N N U A L
R E P O R T &
A C C O U N T S
T W E N T Y 2 2
www.valirx.com
G R O U P S T R AT E G I C R E P O R T,
R E P O R T O F T H E D I R E C T O R S
AND AUDITED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED
31 DECEMBER 2022
FOR
VALIRX PLC
ValiRx Plc
Contents of the Consolidated Financial Statements
for the year ended 31 December 2022
C O M PA N Y I N F O R M AT I O N
Company Information
S T R AT E G I C R E P O R T
Chairman’s Report
Chief Executive’s Report
Group Strategic Report
G O V E R N A N C E
Corporate Governance
Report of the Directors
Statement of Directors’ Responsibilities
Report of the Independent Auditors
F I N A N C I A L S TAT E M E N T S
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
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COMPANY
INFO RMATION
ValiRx Plc
CONNECTED INNOVATION
Company Information
for the year ended 31 December 2022
D I R E C T O R S :
Dr S J Dilly
Dr K Cox
M Lampshire
G Desler
S Panu
S E C R E TA R Y:
G Desler
R E G I S T E R E D O F F I C E :
Stonebridge House
Chelmsford Road
Hatfield Heath
Essex
CM22 7BD
R E G I S T E R E D N U M B E R :
03916791 (England and Wales)
A U D I T O R S :
Adler Shine LLP
Chartered Accountants & Statutory Auditor
Aston House
Cornwall Avenue
London
N3 1LF
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STRATEGIC
REPORT
ValiRx Plc
CONNECTED INNOVATION
Chairman’s Report
for the year ended 31 December 2022
ValiRx achieved a major milestone in October 2022 with the formation of Cytolytix Limited, a majority
owned subsidiary and SPV to aid the development of an exciting new technology to treat triple negative
breast cancer. We believe this collaboration with Kings College London will serve as the model for future
evolution of our collaborative development pipeline.
Two other projects with academics from Hokkaido and Barcelona University have also been in the
evaluation phase throughout the year and, subject to a successful conclusion of our experiments, will
also be incorporated into SPVs.
Nevertheless, successful evaluation of new science cannot be guaranteed and it remains important to build a
risk balanced portfolio of projects to maintain a steady flow of new assets for further development.
To this end, we were very pleased to welcome Dr Cathy Tralau-Stewart to the team in September 2022 as
interim CSO (now permanent). Cathy has brought a wealth of experience in assessing novel science, particularly
from academic institutions, and has taken the lead in identifying, securing and developing a range of novel
assets that help to manage development risks.
We were also delighted to have appointed Stella Panu as a new Board member. Stella has brought deep
experience in both corporate finance and M&A and is helping the team to drive forward the tCRO® strategy,
with the aim of generating near term income for ValiRx.
During 2022 it became clear that initiating the tCRO® through a buy-and-build strategy was going to be a
significant challenge as the valuations of suitable acquisition candidates for a core laboratory facility, on which
to build the tCRO®, were excessive and unlikely to create sufficient shareholder value. With Stella’s guidance and
Suzy’s CRO expertise, the previous buy-and-build approach has been modified to focus on establishing our
own core laboratory, incorporating the necessary technologies to support ValiRx’s in-house pipeline and attract
3rd party business. We believe this will enable ValiRx to build the tCRO® with lower risk and lower cost,
leading to more efficient use of capital.
Having successfully established the tCRO®, transferred our in-house projects and secured new customers, we
will continue to seek opportunities to acquire capabilities and technologies that complement the overall vision
of improving translational research and transition ValiRx into an income generating and profitable company.
Efforts continue to out-licence our clinical assets VAL201 and VAL401 but, disappointingly, we have not yet
concluded out-licencing deals. The Letter of Intent with TheoremRx for VAL201 continues to be exclusive at this
time as we still expect their funding efforts will progress to a conclusion, albeit more slowly than anticipated.
The shift of the tCRO® strategy towards a build-and-buy strategy and the delays to TheoremRx funding
necessitated a placing in 2022, which successfully raised £2.5m, including a broker option. These funds and the
recent post-period raise of £1.3m now places ValiRx in a strong position to continue to build both our in-house
pre-clinical development pipeline and the tCRO® throughout the next period.
As ever, we would like to thank all shareholders, both old and new, for your continued support as ValiRx navigates
its transition towards a profitable future.
Kevin Cox
Chairman
Date: 1st June 2023
5
ValiRx Plc
CONNECTED INNOVATION
Chief Executive’s Report
for the year ended 31 December 2022
2022 was a key year for ValiRx in building the team for the next stage of growth within our strategy.
Welcoming a new Board member and two new senior scientific executives within 2022, and post-period,
three laboratory based scientists and commercial expert, enabled a sense of growth and development.
Building a culture within the new team of pride in achieving excellent science, whether that science is
within our in-house portfolio, within our university collaborative evaluations or for our service users;
the culture of innovation, ideas and communication runs centrally.
The year was marked with extremes of highs and lows, with the delay to the finalisation of the sub-license of
VAL201 to TheoremRx balanced against the high points of the launch of Cytolytix, initiation of the Barcelona
Evaluation project and development of our tCRO® concept.
The Letter of Intent signed with TheoremRx was expected to convert to a full sub-license of VAL201 within the
early part of 2022, subject only to TheoremRx completing their financing round. While we appreciate that
2022 has presented an unexpectedly more challenging financial market than anticipated, we feel acutely the
frustration of this continued delay, but remain satisfied that if sufficiently financed, TheoremRx present a good
partnership opportunity for the VAL201 project.
The launch of majority-owned Cytolytix to house the CLX001 project for the treatment of triple negative breast
cancer was the highlight of 2022. After a 9 month evaluation period consisting of manufacturing assessment,
in vitro and in vivo testing, the nano-formulated peptide licensed from Kings College, London, proved to be
commercially and scientifically appropriate for further development.
As the first project to successfully graduate our evaluation process, CLX001 is our flagship example of how we
work with academics to bring innovative science into industry.
This case study is helping to set the standard for further evaluations, collaborations and relationships from
across the globe.
The second evaluation project to run to completion in 2022 was the peptide for the treatment of pancreatic and
uterine cancers, licensed from Hokkaido University. After a 12 month period of evaluation, we requested an
extension of the period after substantial manufacturing process challenges were resolved. This evaluation period
is now expected to complete in June 2023.
A third parallel evaluation project was brought in during 2022 from Barcelona University, targeting the KRAS
protein proposing to treat pancreatic and endometrial cancers, demonstrating the global distribution of our
university outreach programme.
Further development of the translational Contract Research Organisation (tCRO®) strategy has seen an
evolution from our initial buy-and-build strategy to a more steady build-and-buy proposal. The tCRO® build
intends to create a unique service offering by combining our experience as a virtual biotech user of such
services with our expertise in translating data into meaningful biological outcomes.
Built with commercial expectations in the foundations of the tCRO®, we believe our service offering will fill a niche
area within the Women’s Health and Oncology service market landscape to serve small and mid-sized biotechs
in an industrially-focussed, high quality, data-driven manner.
Our build-and-buy approach has seen the Company lease lab facilities in a well established biotech incubator
hub, MediCity (Nottingham, UK) and post-period, launch Inaphaea BioLabs Limited as our subsidiary tCRO®.
Using this lab as our foundation, we can build upon this, with intent to acquire technologies and techniques to
operate alongside as well as within these headquarters. The collaboration with Physiomics PLC, announced
post-period, to use their mathematical modelling and analysis techniques in an integrated services offering
ensures that Inaphaea is able to offer a key capability to complement our data generation, which we believe
will be highly valued by our service users.
6
ValiRx Plc
CONNECTED INNOVATION
Chief Executive’s Report
for the year ended 31 December 2022
Outlook
2022 was a year to strengthen our strategic position, ensuring growth is maintained from the foundations laid
over the past three years. Our renewed pre-clinical development strategy is proving successful with Cytolytix
leading the way to demonstrate our capabilities and we look forward to seeing that progress into the first
stages of pre-clinical development during 2023.
Our target is to identify four evaluation projects to enter the pipeline every year, and with our new CSO now
available to help source these opportunities we anticipate this number being achieved for 2023, building from
the three during 2021-2022.
The post-period launch of our tCRO, Inaphaea BioLabs Limited, provides the opportunity for ValiRx to
generate revenue streams from the service side of the Company, with these expected to commence in 2023.
We anticipate that as Inaphaea builds a reputation for delivering high quality, well thought-out,
well conducted science, the potential for revenues will build over time.
Financial overview
Our financial results show the total comprehensive loss for the year ended 31 December 2022 of £2,366,488
(2021: £1,518,212) and a loss per share of 3.06p (2021: Loss – 2.34p).
Research and developments costs were £551,233 for the year ended 31 December 2022 as compared to
£303,789 in 2021, an increase of £247,444. In addition, total wage costs of £254,050 (2021: £216,238) were
expended on research and development during the year.
Administrative expenses were £1,502,355 (2021: £1,216,391) for the year ended 31 December 2022, an increase
of £285,964.
Cash at the bank as at 31 December 2022 was £1,137,477 compared to £593,672 in 2021.
I would like to thank the staff and Board members for all their contributions and shareholders for their
continued support. We look forward to implementing our evolving strategy while continuing to maintain our
culture of openness and transparency to all stakeholders.
Dr S J Dilly
Director
Date: 1st June 2023
7
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
The Directors present the strategic report and financial statements for the year ended 31 December 2022.
Company information and highlights
ValiRx accelerates the development of treatments in cancer and women’s health to improve patient lives.
We provide the scientific, financial and commercial framework to enable the rapid translation of innovative
science into clinical development. With our extensive and proven experience in research and drug development,
we select and incubate promising novel drug candidates and guide them through an optimised process of
development, from pre-clinical studies to clinic and investor-ready assets.
Building on our experience in pre-clinical drug development, we have assessed options to create an integrated
translational Contract Research Organisation (tCRO®) to offer connected innovation services to the wider
pharmaceutical and biotech industry, as well as supporting in-house programmes.
Strategy and Vision
Our therapeutic focus prioritises cancer, related conditions and women’s health. Our pipeline is enriched
by robust partnerships with academia and industry, fuelled by our intellectual and financial resources.
Our development process varies for each of our molecules and is specifically structured to minimise risk and
maximise the chances of successful clinical development and approval for clinical trials
We identify, incubate and accelerate innovations that focus on the needs of those who matter most – patients.
With a sense of urgency and determination, we select molecules with the highest potential to improve patient
lives throughout treatment.
We are continuously working with our partners to think of new and innovative ways to focus on our therapeutic
areas. In August 2022, we launched Cytolytix, as a majority-owned ValiRx subsidiary, which signed an IP license
agreement with King’s College London. This partnership has been established to progress the triple negative
breast cancer project, CLX001, through pre-clinical development to a stage of readiness for clinical trials.
We develop treatments derived from diverse and disruptive innovations that have the potential to progress
rapidly upstream and deliver value to all of our stakeholders. Our model and industry expertise enables us to
accelerate the translation of promising new drug candidates to early clinical studies. Strategic partnering to
co-develop and fund later-stage clinical trials, allows ValiRx to continue to build a risk-balanced pipeline of
novel projects.
8
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
Business Structure
Previously operating as a virtual biotech company, ValiRx has assessed options to bring pre-clinical testing
services in-house and invest in advanced data analysis and data implementation technologies, operating to
optimally process our own pipeline and offering an integrated service to external parties to generate revenues.
In Q4 2022, ValiRx announced an intention to lease a UK-based laboratory facility to commence building the
tCRO®, with options highlighted to buy-in technologies or acquire companies to facility the differentiation of the
tCRO® from industry standard CROs. Post period, wholly-owned ValiRx subsidiary, Inaphaea BioLabs Limited
was launched. Headquartered in the ValiRx laboratory in MediCity (Nottingham, UK), Inaphaea is intended to
provide the cornerstone facility from which to build the tCRO®.
This laboratory, together with new testing services, serves as the foundation of a novel translational Contract
Research Organisation (tCRO®), enabling our in-house pipeline growth to be supported through both the
revenues generated and the expertise within the laboratory team.
We will continue to seek collaborations with academic innovators in oncology and women’s health and build
a risk-balanced pre-clinical pipeline for future out-licencing.
The Group retains the following divisional companies:
1. ValiPharma: a biopharmaceutical company which holds patents and licences for ValiRx in respect of the
development of medicines to bring advanced therapeutic options for the treatment of cancer.
2. ValiSeek: a joint venture company with Tangent Reprofiling Limited (a SEEK group company) holding
the IP for VAL401.
3. Cytolytix Limited: a majority owned company holding the IP for CLX001.
4. Inaphaea BioLabs Limited: a wholly owned subsidiary incorporated on 13 January 2023 to operate
the tCRO®.
The Company listed on the Alternative Investment Market (“AIM”) of the London Stock Exchange
in October 2006.
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Within our category of research for Women’s Health,
we are considering drug candidates for treatment of
conditions that can effect both men and women, but
that either have a bias towards women (for example
auto-immune conditions such as Lupus and
Auto-immune Hepatitis) or have a recognised
treatment that is optimised for men but remains
sub-optimal for women (such as anti-coagulants
where many persist for longer in women than in men,
causing increased risk of side effects).
Endometriosis
Endometriosis is a gynaecological medical condition
in which cells from the lining of the uterus
(endometrium) appear and grow outside the uterine
cavity. This growth fluctuates in a pattern alongside
the menstrual cycle, under the influence of female
hormones.
These misplaced endometrial-like cells are influenced
by hormonal changes and respond in a way that is
similar to the cells found inside the uterus; hence
symptoms often worsen with the menstrual cycle.
The treatments chosen will depend on symptoms,
age, and lifestyle plans, currently centring around pain
relief and hormone suppression; the latter leading to
potential infertility and bone weakening side effects.
VAL301 in endometriosis
VAL301 presents an opportunity to suppress
hormone-driven cellular growth in the absence of
outright hormone suppression. By interrupting only
the hormone driven cell growth while sparing the
other hormone activities, the infertility and related
side effects are expected to be avoided.
Currently in the early stages of pre-clinical testing
by ValiRx, this theoretical benefit will be investigated
in future trials.
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
THERAPEUTIC AREAS
Women’s Health
Diseases associated with Women’s Health are one of
our key focus areas for in-house pre-clinical research.
The discussions with Universities across the world,
typically identify a wealth of opportunity in oncology,
including female-centric oncology, such as the
gynaecological cancers. However, there is a clear
dearth of innovative research ready for translation
in other areas of women’s health.
The VAL301 project is a good example of a drug
candidate for women’s health. Initially developed
as a subset of the VAL201 programme for the treatment
of men with prostate cancer, the overlap in biological
mechanisms, i.e. the prevention of hormone
stimulated cell proliferation, also affords the potential
for the peptide to be a candidate for the treatment
of endometriosis. Endometriosis is not a cancerous
condition, but is characterised by benign, inappropriate
growth of hormone dependent tissue.
Candidates for the treatment of conditions such as
endometriosis, along with Poly Cystic Ovary Syndrome
(PCOS) and symptoms of menopause clearly all fall
into our target area of women’s health. Most drug
candidates are optimised for dose levels, tolerability,
pharmacokinetics and drug metabolism during
early-stage clinical trials, initially in healthy volunteers
for Phase 1 and then typically in carefully selected
patients in Phase 2. The vast majority of patients
recruited for these early-stage trials are either women
who are post-menopausal or men unless there is a
strong rationale explained to the regulators to include
younger women (for example if the disease only occurs
in young women) and a technique to avoid risk to an
unborn child.
Although it is now widely acknowledged that
pre-menopausal women can respond very differently
to drugs in comparison to both men and
post-menopausal women, drugs are still routinely
clinically optimised for men. This results in a higher
than necessary clinical risk during Phase 3 clinical
trials, when the drug is provided and tested in a much
broader range of patient volunteers, as the women
now being included may display unexpected
tolerability or lack of efficacy purely due to the
gender-specific optimisation process.
Although the rationale for these restrictions was well
founded, in particular in the light of the damage to
unborn children of thalidomide, the technologies to
better understand a drug candidate’s potential for
reproductive toxicological impacts, as well as better
monitoring of women within early-stage clinical trials
– including very early pregnancy detection methods –
enables these restrictions to be reconsidered.
1 0
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
THERAPEUTIC AREAS
Cancer
ValiRx is focused on developing treatments for
difficult-to-treat types of cancer that extend survival
and improve patient experience. Traditional
approaches, such as chemotherapy, extend patient
survival but also bring high side effect burdens and
complex combination treatment regimens.
Whilst individualised treatments and target therapies
have improved outcomes for some types of cancer,
many types of cancer have insufficient treatment
options and rely on drugs that have remained
unchanged for decades.
By targeting precise biological mechanisms, we aim
to improve the patient experience in terms of both
survival and quality of life.
Clinical Assets (to be out-licenced)
VAL201 in prostate cancer
VAL201 is a short peptide being studied for the
treatment of prostate cancer. The peptide structure
is inspired by the structure of the naturally occurring
androgen receptor and is designed to intercept and
prevent the binding of the androgen receptor to SRC
kinase; an enzyme implicated in cancerous cell growth
pathways. By preventing the androgen-mediated
activation of SRC kinase, VAL201 can prevent
cancerous cell proliferation (or growth) without
interfering with other functions of the androgen
receptor or SRC kinase. This precision method,
mimicking a natural process, proposes a high
specificity of cancer treatment, with a lower side
effect profile.
VAL201 has completed a Phase 1/2 clinical trial in
the UK, investigating the effects of different dose
levels of the drug to establish the safety, tolerability
and first indications of disease impact. VAL201 is the
subject of a Letter of Intent to sub-license to
TheoremRx Inc. This sub-license covers the use of the
VAL201 peptide for all oncology usage and is expected
to generate income of approximately $2M USD over
the first two years and up to $61M USD plus royalties
if the project is successfully launched for the
treatment of prostate cancer. Further milestone
payments are expected of over $37M USD if VAL201
is used for additional oncology indications.
Finalisation of the sub-licence is subject to a
successful fund raise by TheoremRx.
1 1
VAL401 in adenocarcinoma
VAL401 is the reformulation of the established anti-
psychotic drug risperidone. Formulated into a lipid-
filled capsule for oral, once daily administration,
VAL401 enables an anti-cancer activity, via cancer
cell metabolism enzyme, Hydroxysteroid-dehydro-
genase type 10 (HSD10), not seen with conventional
risperidone.
VAL401 has completed a pilot Phase 2 clinical trial,
treating patients with end-stage non-small cell lung
cancer. These patients demonstrated a statistically
significant improvement in overall survival from
diagnosis over case-matched control patients in the
same clinics; and showed improvements in quality of
life during treatment.
Identifying quality of life improvement in nausea, pain
and appetite, has identified pancreatic adenocarci-
noma to be a preferred disease to assess in the next
clinical trial of VAL401.
VAL401 is currently undergoing a sustained out-
licensing effort to identify a partner to complete the
clinical development programme.
CLX001 in triple negative breast cancer
Triple negative breast cancer accounts for 15% of
breast cancers. However, this type of cancer requires
new research, as it is more aggressive, harder to treat
and more likely to return.
CLX001 is a peptide in a nanoparticle formulation and
is designed for precision destruction of cancer cells to
avoid excessive side effects. CLX001 is at the pre-
clinical trial stage in the drug development process.
The investigation of the candidate peptide with a
battery of in vitro and in vivo tests concluded that there
was good evidence of biological activity and a strong
rationale for further development.
Evaluation Strategy of Pre-clinical rojects
Prior to in-licensing projects in full, ValiRx carries out
a rigorous scientific and commercial evaluation
programme on the project at its own expense. During
the evaluation period (typically 6-12 months) ValiRx is
able to assess whether the project is a good fit for the
pre-clinical pipeline. If the evaluation is a success, a
full license will be executed with the innovator and the
asset will be incorporated into a dedicated SPV, most
likely a ValiRx subsidiary.
The scientific assessment typically consists of a range
of cell-based assays to understand the biology and
demonstrate the mechanism of action of the lead drug
candidate; and to determine the disease area of
highest potential for further development.
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
THERAPEUTIC AREAS
BC201 in Covid-19
Coronavirus SARS-CoV2 is the causative pathogenic
virus of Covid-19. This highly contagious virus causes
Acute Respiratory Distress Syndrome (ARDS) in many
patients, which can lead to hospitalisation and death.
The pandemic was declared in March 2020, and the
world is now fully aware of the prevalence and serious
nature of the virus.
Patients displaying ARDS can respond well to sup-
portive treatment including administration of positive
pressures of oxygen, however, despite this, a proportion
still go on to experience more severe symptoms.
These symptoms are believed to be caused by the
significant, multi-organ damage that can be caused
by an excessive response of the immune system, even
after the viral infection has reduced. This is known as a
hyperimmune response.
BC201 is a combination of the peptide ingredient of
VAL201/VAL301 with complementary active compo-
nents to dampen this excessive immune response and
consequently improve severe symptoms of Covid-19.
The theoretical action of the peptide is two-fold: by
blocking the Androgen Receptor mediated activity of
SRC Kinase, the peptide is postulated to down-regulate
the expression of TMPRSS2 a transmembrane protein
believed to be required for Coronavirus cell entry; and
by directly dampening the immune response.
ESTABLISHING A TRANSLATIONAL RESEARCH ORGANISATION (tCRO®)
Current Pipeline
Discovery
Optimisation
Pre-clinical
Clinical
CYTOLYTIX CLX001 TRIPLE NEGATIVE BREAST CANCER
HOKKAIDO UNIVERSITY
Under Evaluaton Agreement
BARCELONA UNIVERSITY
Under Evaluaton Agreement
VAL301
BC201
Endometriosis
Sepsis and Covid-19 complications
VAL401
Lung/pancreatic cancer
VAL201
Prostate cancer
1 2
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
Previously operating as a virtual Biotech Company, ValiRx out-sourced all testing of current evaluation and
pre-clinical projects to a wide range of external contract research organisations (CROs). The Company is of
the view that this fragmented approach to early-stage drug development is non-optimal and is assessing
options to acquire capabilities and infrastructure to create a more efficient and effective integrated
translational drug development service.
Operating as a wholly owned subsidiary company, Inaphaea BioLabs Limited, the integrated services will
be used for both in-house projects and offered to third parties, such as the increasing number of innovative
biotechnology companies. The revenue generated from providing pre-clinical development services will
support continued investment in advanced testing and analysis technology and support the progression
of ValiRx in-house pipeline projects.
Strategy - a consolidation opportinity
Inaphaea
BioLabs
tCRO®
Traditional
CRO
Data Application
Professional services providing expert
knowledge to guide future development
decisions and reduce risk
Professional services to guide future development
provided to Inaphaea users through collaboration
between ValiRx and Physiomics experts
Bio-infomatics
Overlay large data collation, curation
and analysis
Data collation, curation and analysis initiated
within collaboration with Physiomics
Data Generation
Acquire advanced data-rich
in-vitro technologies
Data-rich in-vitro technologies to be run within
Inaphaea BioLabs facilities; more technologies and
capabilities to be added
Core Infrastructure
Established pre-clinical laboratory
facility
MediCity Laboratory facility established
Translational Drug Development
Future - broadening to
external service
Service Pipeline
Service Revenues
Collaborative transation
services for academia
Service and collaborative
development piplelines
Licensing Revenues
Today - focussed on
academic collaborations
Advanced pre-clinical capabilities:
• High content data generation
• Large scale data curation and analysis
• Application of comprehensive biological
insights
• Women’s Health & Oncology specialism
1 3
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
Management Team and Board Overview
ValiRx comprises a multi-disciplinary team of scientists, technologists and business leaders, committed
to providing the framework required for successful drug development. Collaboration is the key to making
this happen; each member of the ValiRx team plays a vital role in the strength and success of company
programmes, which are focused on achieving the improved outcomes and quality of life for patients,
in the most effective and efficient way.
Board
Dr Suzanne Dilly
Chief Executive Officer (Appointed June 2020)
Suzanne is an experienced entrepreneurial scientist. After commercialising her Chemical
Biology post-doctoral research in the University of Warwick spin-out, a2sp Limited,
Suzanne was awarded a prestigious Royal Society of Edinburgh Enterprise Fellowship,
during which formal commercial and entrepreneurial training completed her transition
from lab to boardroom.
Completing commercial transactions to progress projects through multiple companies,
Suzanne has had executive and leadership roles in biotech companies since 2006.
Dr Kevin Cox
Non-Executive Chairman (Appointed June 2020)
Kevin has over 25 years’ experience in the life science industry. Serving as CEO of high
growth biotechnology businesses, he has extensive experience in strategy, corporate
development, M&A, financing and joint ventures. With a passion for improving
translational science, Kevin has strong links to government, funding bodies and
academia, and has contributed to a number of public sector advisory committees.
Kevin currently has non-executive roles with Biorelate Limited
and the British Neuroscience Association.
Mr Gerry Desler
Chief Financial Officer and Company Secretary
Gerry is a chartered accountant, who qualified in 1968 with a City firm, before becoming
a partner (1970) and Senior Partner (1985). During his time in the City, he has specialised
in consultancy work, much of it involving funding and venture capital.
Gerry was previously the Finance Director of Premier Management Holdings plc, an AIM
listed company and is on the board of a number of private companies. Gerry also held
the position as Company Secretary at the AIM listed company Prospex Energy PLC.
Mr Martin Lampshire
Non-Executive Director (Appointed May 2020)
Martin started his career in Lloyds Bank’s Commercial Services division in 1989 after
completing the ACIB qualification. He has over thirty years’ experience in Corporate
Broking, assisting in a variety of equity raises including IPOs, secondary fundraisings,
vendor and private placings across a variety of sectors.
He has also worked in a number of overseas financial centres including
Hong Kong, Singapore, Kuala Lumpur and Dubai. Martin is currently an
Executive Director of Global Resources Investment Trust Plc and a Non-Executive
Director of Hamak Gold Ltd and Boston International Holdings Plc.
1 4
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
Management Team and Board Overview
Stella Panu
Non-Executive Director
With over 20 years’ experience in corporate finance and investment management,
Stella’s expertise will support the ValiRx Board and senior management team to unlock
investment potential and accelerate and manage business growth for the Company.
In her role, she will oversee ValiRx’s M&A activity, advising on corporate structure
and governance, risk management, and shareholders’ rights.
Mr Mark Treharne
Corporate Development Manager
Mark began his career in the City in 2011 and has worked in Corporate Broking
and Equity sales working for numerous different firms including Daniel Stewart,
Northland Capital Partners and Pello Capital.
His role includes enhancing the reputation of the Company within the City and
working closely with City firms to identify new therapeutic assets to incorporate
into the ValiRx portfolio.
Mr Kumar Nawani
Head of Operations
Kumar has been working over 20 years in international trade, client & vendor
management, business development, brand development, e-commerce, procurement,
IT management & compliance roles with established public and private companies
in the UK and previously in Hong Kong.
Kumar has been with the ValiRx Group since January 2008 as an active member
of the ValiRx management team.
Dr Cathy Tralau-Stewart
Chief Scientific Officer
Cathy is an experienced therapeutics development scientist and pharmacologist.
Working within some of the world’s leading pharma and academic research
establishments she has developed a broad knowledge of drug discovery and the
translation of early research innovation into developable drug discovery programs.
Zai Ahmad
Pre-clinical Project Manager
Zai has over 25 years’ experience in the life science industry. Originally in Neuroscience,
looking at synaptic junctions associated with memory and neurotransmitter release
and pathways associated with Parkinson’s Disease and cardiovascular regulation.
Zai moved to oncology as an opportunity to be closer to patients and to have a
direct impact on patient survival.
Working at the Institute of Cancer Research (ICR) for 14 years, Zai established a
specialism in xenograft and transgenic models for use in drug development.
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ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
Scientific Advisors
ValiRx retains the services of a core team of scientific advisors to provide expert opinions on all pipeline
projects in a wide range of therapeutic areas. A Science Advisory Board (SAB) has been established, which
meets quarterly to critically review all projects and identify future trends in biomedical research, in addition
to holding meetings with individual members of the ValiRx team in between.
The core team of advisors is summarised below, additional consultancy from other individuals is obtained
as required:
Dr Wilson Caparrós-Wanderley
(Independent Consultant)
Dr Wilson Caparrós-Wanderley is a pharmaceutical executive with 25 years’ experience in biomedical R&D.
He obtained a first degree from the University of Barcelona and a PhD from the University of London.
Upon receiving his PhD in the 90’s, he completed postdoctoral fellowships at King’s College London and
Imperial College before moving to industry. During this time, he worked on viral vaccines, gene therapy vectors,
cancer treatments and immunomodulatory therapies.
In the mid 2000’s Dr Caparrós-Wanderley was appointed Chief Scientific Officer of PepTcell Ltd (later the
SEEK Group). During his 11-year tenure as CSO, he oversaw the expansion and progression of the company’s
intellectual property into viable vaccine, respiratory and oncology therapies. At the time of his leaving SEEK
in 2015, the company had two pharmaceutical products in the market and several others in late stage of
development. Dr Caparrós-Wanderley has authored multiple patents, scientific articles and book chapters
and has been an invited speaker at conferences and WHO events.
He is currently acting as a consultant to the biopharmaceutical industry.
Dr Mark Eccleston
(OncoLytika Ltd)
Dr Mark Eccleston is an enthusiastic and passionate biotechnology entrepreneur with over 25 years experience
in the sector, both in academia and industry. He holds a PhD in Polymer Chemistry and worked on a range of
translational research projects focussed mainly on non-viral gene delivery.
Mark is the founder and Managing Director of OncoLytika Ltd. a technical consultancy company operating
mainly in the biotechnology and pharmaceutical sector. OncoLytika has an excellent track record raising soft
funding (UK and EU) for internal projects and client companies including internationally located private and
public limited companies across the diagnostics and therapeutic sectors as well as academia.
Dr Christophe Chassagnole
(Physiomics PLC)
Christophe is a Biochemist and Systems Biologist (Pathway modelling) by training. After completing his PhD,
he held academic positions in metabolic engineering, before joining Physiomics in 2004. Where he
is leading the science and overseeing customer projects. Physiomics provides consulting services in PK/PD
and other mathematical modelling including to large pharmaceutical companies.
For ValiRx, Physiomics have performed two large projects, which have also included working with Mark Eccleston
during his historic position at ValiRx:
- Systems biology project (apoptosis model) to validate potential GeneICE targe t (Go/No Go decision).
- PK/PD modelling to support VAL201 development, initially pre-clinical modelling and first in man dose
prediction, project has resumed with availability of clinical data.
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ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
Scientific Advisors
Professor Paul Taylor (University of Leeds)
(University of Leeds)
Professor Paul Taylor is part of the Chemical Biology & Medicinal Chemistry research group and a member of
the Astbury Centre for Structural Molecular Biology at the University of Leeds. Paul is also a Pro-Dean in the
Faculty of Engineering & Physical Sciences. He is an experienced leader in Higher Education where he seeks
to build effective, collaborative teams to drive innovation.
Paul’s research career is marked by transdisciplinary, collaborative projects and he has published widely with
colleagues from Biological Sciences, Engineering, Medicine and Social Sciences as well as within his core
discipline of Chemistry. Paul’s current research interests include molecular evolution and cancer therapy, where
he uses a combination of computational and experimental approaches.
Commerical Advisors
ValiRx has also formed a Commercial Advisory (CAB) which considers the strategic direction of the Company.
This make up of this board is not fixed and additional members will be included as required.
Current CAB members are:
Mr Jerry Randall (Venture Life Group)
Dr Mark Eccleston (OncoLytika Limited)
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ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
ValiRx maintains a strong communication process to standardise and improve shareholders’ experience
of communicating with the Company.
The Board recognises the importance of effective and timely communication with all stakeholders, including
shareholders, investors, innovators and staff. The business and science of biomedical development can be
complex and difficult to articulate in a clear and concise way through regulated channels. The Company
understands and encourages the desire of shareholders to ask questions about scientific or corporate
progress and is mindful of the need to ensure all shareholders have fair and equal access to information
about the Company, as required by the AIM Rules and the Market Abuse Regulations.
During 2022, shareholders were consulted on their preferred method of communication, and expressed a
preference for quarterly webinar-based Q&A sessions, replacing the previous written monthly Q&A publications.
These quarterly events are scheduled to continue during 2023.
ValiRx also maintains a current list of Frequently asked Questions (FAQs) on the Company website.
A link to the latest FAQs can be found here: https://www.valirx.com/shareholder-communications.
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ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
SECTION 172(1) STATEMENT
Each Director is required by the Companies Act 2006 to act in the way they consider, in good faith, would be
most likely to promote the success of the Company for the benefit of its members as a whole and in doing so
are required to have regard for the following:
- the likely long-term consequences of any decision;
- the interests of the Company’s employees;
- the need to foster the Company’s business relationships with suppliers, customers and others;
- the impact of the Company’s operations on the community and the environment;
- the desirability of the Company maintaining a reputation for high standards of business conduct; and
- the need to act fairly as between shareholders of the Company.
In 2018, the Company adopted the Corporate Governance Code for Small and Mid-Sized Quoted Companies
from The Quoted Companies Alliance (the “QCA Code”). The QCA Code is an appropriate code of conduct for
the Company’s size and stage of development. In the Corporate Governance Report, on page 24 are comments
regarding the application of the ten principles of the QCA Code. Some s.172 considerations are addressed in
more detail in the Corporate Governance Report.
The Board considers the Company’s major stakeholders to include employees, suppliers, partners and
shareholders. When making decisions, the interest of each stakeholder group individually and collectively is
considered. Certain decisions require more weight attached to some stakeholders than others and while
generally seeing the long-term interest of the shareholders is of primary importance, the Directors consider
those interests are best served by having regard to the interests of the other key stakeholder groups and,
in fact, to all the s. 172 considerations.
Long-term value
The aim of all business resources allocation is to create long-term value through the management of a
balanced but dynamic portfolio of pre-clinical projects for development towards clinical readiness and
partnering.
The Chief Executive’s Report on page 6 describes the Company’s activities, strategy and future prospects.
Some s. 172 considerations are also addressed in the Chief Executive’s Report, including the considerations
for long term strategic development.
Our people
It is imperative that the core team has the right breadth of experience to manage all facets of early drug
development, including scientific, commercial and operational considerations. The Company has and will
continue to ensure appropriate training and engagement of employees to ensure successful delivery of the
strategy. Effective project management processes will be employed so that all employees are clearly aware
of the role they play in achieving the business objectives. As the number of employees grows, potentially
through acquisition, the Company will ensure that relevant processes and procedures will be extended for
the benefit of all staff.
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ValiRx Plc
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Group Strategic Report
for the year ended 31 December 2022
Business relationships
As ValiRx evolves from a wholly virtual drug developer to an integrated translational CRO, it is essential the
Company continues to maintain good relationships with its suppliers by taking a collaborative approach and
abiding by commercially acceptable business terms that benefit all parties.
Community and environment
At present, the Group’s impact on the community and the environment is modest but the Board endeavours
to ensure that the business and suppliers act in an ethically and in an environmentally conscious manner.
The Board intends to continue to minimise unnecessary travel and use online meetings when possible.
The Group is also committed to the 3R’s principles in all its pre-clinical studies.
Business conduct
The Board recognises its responsibility for setting and maintaining a high standard of behaviour and
business conduct. The Company operates within the QCA Code framework and complies with all relevant
regulatory requirements for developing new treatments for human use. The Company maintains a suite
of standard operating procedures (SOPs) that describe the management system. All employees are trained
regularly on these procedures. All material information is disseminated though appropriate channels and
is available to all stakeholders through the Company’s corporate presentations, news releases and website,
www.ValiRx.com. This is described in more detail in the Corporate Governance Report Principle 8.
Shareholders
The Directors are committed to treating all shareholders equally. As part of its decision-making process,
the Board considers the interests of shareholders as a whole. All shareholders are provided with equivalent
information through RNS announcements, and the ValiRx website. The Company has also introduced a
quarterly Q&A process with shareholders to help improve clarity of business activities in a timely manner.
For more information see Principles 2 and 3 in the Corporate Governance Report.
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ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
PRINCIPAL RISKS AND UNCERTAINTIES
ValiRx is a biopharmaceutical development group and, in common with other companies operating in this field, is
subject to a number of risks and uncertainties. The principal risks and uncertainties identified by ValiRx
for the year ended 31 December 2022 are below.
Risk Area
Description
Mitigation
Research and
development
The Group has embarked on a new
R&D strategy to develop pre-clinical assets
and may not be successful in building a
balanced pipeline of product candidates
for subsequent out-licencing.
Creating the
tCRO®
TheGroup’s strategy has recently evolved to
include the creation of a tCRO® with high
growth potential to generate income and
(in-part) provide financial support to progress
the internal pre-clinical development pipeline.
Commercial
(current clinical
programmes)
Failure to complete out-licencing of current
clinical projects on acceptable commercial
terms. The strategic shift towards projects
at an earlier stage means that ValiRx will no
long-er lead and fund clinical studies.
VAL201 and VAL401 will require out-licencing
partners for continued development.
Cash flow
The cash required to continue development of
the pre-clinical pipeline is greater than can be
generated from the tCRO®.
2 1
High levels of business development activity
to identify a range of promising candidates.
Rigorous assessment and selection processes
for any candidate entering the development
pipeline. Effective project management
processes and stage-gates to review
suitability for further development and
eventual out-licencing. The Group utilises a
range of external scientific, regulatory and
clinical experts to help guide its development
programmes. The progress of the development
programmes and identification of commercial
partners for clinical development represents
the best indicator of performance.
The Group recognises the specific risks
associated with creating the tCRO®, which
include:
- Failure to achieve the desired growth rates
- Longer than expected time scales to
generate income and cover the cost of the
internal development pipeline
- An inability to raise funds to acquire
relevant companies and technologies
- A lack of suitable acquisition candidates
Ineffective integration of acquired
-
companies
The Group is vigorously pursuing all
business development avenues to identify
out-licencing options.
It is expected that out-licencing of VAL201
and VAL401 will provide additional reserves
to support the new strategy. The Group
will maintain an efficient overhead structure
to minimise non-productive costs. Creation
of the TRO provides an opportunity for
service revenues to enter the ValiRx cash
flow. The pre-clinical development pipeline
will be balanced to ensure cash
demands are commensurate
with that generated from the
tCRO®.
ValiRx Plc
CONNECTED INNOVATION
Group Strategic Report
for the year ended 31 December 2022
Risk Area
Description
Mitigation
The Group manages its regulatory risk by
working closely with its expert regulatory
advisors and, where appropriate, seeking
advice from bodies on regulatory risk relevant
to the Group’s programmes and activities.
The Group invests in maintaining and
protecting it’s intellectual property to reduce
risks over the enforceability and validity of
patents. The Group works closely with its
legal advisors and obtains where necessary
opinions on the intellectual property
landscape relevant to all programmes and
activities.
The Group has invested in its management
team at all levels. The Directors also believe
that the senior management team is
appropriately structured for the Group’s
size and is not overly dependent upon any
particular individual. The Group has entered
into contractual arrangements with these
individuals with the aim of retaining
their ongoing commitment.
The Group recognises its responsibility
towards the environment and in the way it
conducts its business. It works closely with
all its expert scientific advisors to ensure its
compliance with environmental legislation
and to ensure that all emissions including the
disposal of gaseous, liquid and solid waste
products are controlled in accordance with
applicable legislation and regulations.
Regulatory
The Group’s operations are subject to
laws, regulatory approvals and certain
governmental directives, recommendations
and guidelines relating to, amongst other
things, product health claims, occupational
safety, laboratory practice, the use and
handling of hazardous materials, prevention
of illness and injury, environmental protection
and human clinical studies. There can be
no assurance that future legislation will not
impose further government regulation, which
may adversely affect the business or financial
condition of the Group.
Intellectual
property
The Group’s success depends on its ability
to obtain and maintain protection for its
intellectual and proprietary information.
Patent applications may not be granted,
and existing patent rights may be successfully
challenged and revoked.
Operational
Environmental
matters
The Group’s development and future
prospects depend to a significant degree on
the experience, performance and continued
service of its senior management team,
including the Directors.
The unplanned loss of the services of any of
the Directors or other members of the senior
management team and the costs of recruiting
replacements may have a material adverse
effect on the Group and its commercial and
financial performance.
The Board is committed to minimising the
Group’s impact on the environment and
ensuring compliance with environmental
legislation. The Board considers that its
activities have a low environmental impact.
The Group strives to ensure that all emissions
including the disposal of gaseous, liquid and
solid waste products are controlled in
accordance with applicable legislation and
regulations. Disposal of hazardous waste is
handled by specialist agencies.
ON BEHALF OF THE BOARD:
G Desler
Director, Chair Audit and Risk Committee
Date: 1st June 2023
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GOVERNANC E
ValiRx Plc
CONNECTED INNOVATION
Corporate Governance
for the year ended 31 December 2022
The Board recognises that good corporate governance is essential to building a successful business that
is sustainable for the long term.
The Corporate Governance Statement that follows, explains how our governance framework works and how
the Company has applied the 10 principles of the QCA Code this year.
Corporate Governance Statement
The Board has adopted the Quoted Companies Alliance Corporate Governance Code (QCA Code). The Board
believes that this Code provides an appropriate and suitable governance framework for a Group of our size and
complexity.
We believe the Company is in full compliance with each of the 10 principles of the Quoted Companies Alliance
Corporate Governance Code (QCA Code) and that our governance framework ensures that the Company operates
effectively and with integrity. In 2022, the Company continued a number of organisational and strategic changes
that re-defined our purpose, values and culture. All changes were implemented in full compliance with the
principles of the QCA Code.
This Corporate Governance Statement addresses how the Group complies with each of the 10 principles
of the QCA Code.
Principle
How the Company complies
1. Establish a strategy
and business model
which promote
long-term value for
shareholders
ValiRx is a biopharmaceutical company focused on developing novel medicines to
bring more advanced therapeutic options for the treatment of cancer and improve
patient experience.
For many years the Company has conducted research on a pipeline of early stage
therapeutic candidates, that may prove in clinical trials to treat, among other
conditions, cancer safely and more effectively than currently used chemotherapeutics,
which act indiscriminately, attacking the whole body and causing irreparable damage
to normal cellular processes.
ValiRx has lead drug candidates at varying stages of development for multiple
indications. The Company’s business model focuses on out-licensing therapeutic
candidates early in the development process. By aiming for early-stage value creation,
the Company reduces costs considerably while increasing the potential for realising
value.
2. Seek to understand
and meet shareholder
needs and
expectations
The Board is accountable to shareholders and other stakeholders and is ultimately
responsible for the implementation of sound corporate governance practices
throughout the group. Our Board of Directors is committed to ensuring that the
Group adheres to high standards of corporate governance in the conduct of its
business.
The Board attaches considerable importance to providing shareholders with clear
and transparent information on the Group’s activities, strategy, and financial position.
Details of all shareholder communications are provided on the Group’s website –
www.valirx.com.
Private shareholders currently constitute the main body of investors in ValiRx.
As such, the Board regards regular and interactive meetings as a good opportunity
for shareholders to seek clarity on the Company’s activities. Virtual Q&A sessions are
now held on a regular basis. The annual general meeting provides an additional
opportunity for shareholders to meet and discuss the Group’s business with the
Directors. Announcements on the Group’s half and full-year results presenting all
shareholders with an assessment of the Group’s position and prospects are found
on the website. Shareholders vote on each resolution, by way of a poll. For each
resolution we announce the number of votes received for, against and withheld
and subsequently publish them on our website.
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Corporate Governance
for the year ended 31 December 2022
Principle
How the Company complies
2. Seek to understand
and meet shareholder
needs and
expectations (Cont.)
The Directors actively seek to build a mutual understanding of objectives with
institutional shareholders. The Chair and CEO make presentations to institutional
shareholders and analysts at regular intervals throughout the year. We communicate
with institutional investors frequently through a combination of formal meetings,
roadshows and informal briefings with management.
The majority of meetings with shareholders and potential investors are arranged by
the Company’s broker. Following meetings, the broker provides feedback to the Board
from all fund managers met, from which sentiments, expectations and
intentions may be gleaned.
In addition, we review analysts’ notes to achieve a wide understanding of
investors’ views.
3. Take into account
wider stakeholder and
social responsibilities
and their implications
for long-term success
The Board recognises its prime responsibility under UK corporate law is to promote
the success of the Company for the benefit of its members as a whole. The Board also
understands that it has a responsibility towards employees, partners, customers,
suppliers, and the patients who ultimately benefit from its research and drug
development programmes. Our corporate social responsibility approach continues to
meet these expectations. The Board also understands that it has a responsibility to
take into account, where practicable, the social, environmental and economic impact
of its approach.
Responsibility for the Company’s corporate activities lies with the Senior Management
Team (‘SMT’) who set the Group’s strategic approach and develop key policies. The
Company engages with stakeholders through a number of channels, which include
shareholder communications via the Regulatory News service (‘RNS’), the Company’s
website and its Annual Report & Accounts, results presentations and the Annual
General Meeting and via interviews in the broadcast media and attendance at
investor shows around the country.
Corporate communication and shareholder engagement through these channels not
only gives shareholders a deeper insight into and understanding of the Company’s
activities and of its development, but it also invites feedback, either face-to-face at
such meetings or via email, on how the Company can improve its communications
with stakeholders to better support their needs. By so doing, such engagement
enables the SMT to more effectively work with stakeholders in the future to their
mutual advantage. The Board receives formal feedback from the SMT on a quarterly
basis on the nature of interaction with the stakeholders they meet during each period.
The SMT comprises of the Chief Executive Officer and the Chief Financial Officer
who take leading roles in key strategic areas such as Gender, HR, and Environmental
Management. The SMT is also responsible for ensuring global compliance with key
internal and external policies including:
• Anti-human trafficking and slavery policy
• Diversity policy
• Anti-corruption and bribery policy
• Whistleblowing policy
• UK modern slavery act
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ValiRx Plc
CONNECTED INNOVATION
Corporate Governance
for the year ended 31 December 2022
Principle
How the Company complies
4. Embed effective
risk management,
considering both
opportunities and
threats, throughout
the organisation
An important aspect of risk management is to put in place and consistently work
according to unambiguous Standard Operating Procedures (SOPs). A SOP is a
compulsory instruction to carry out a series of operations correctly and always in
the same manner, avoiding deviations or non-conformances to ensure that the
integrity of scientific investigations and drug manufacture are consistently
maintained.
ValiRx operates an internal Quality Management System (QMS) comprising 14 SOPs
to comply with the most stringent quality standards expected of a drug development
company. Furthermore, the Company regularly audits its suppliers to ensure the
manufacturing process, quality process, and also the drug’s shipment process all
conform to the standard required.
5. Maintain the board
as a well-functioning,
balanced team led by
the chair
Board Composition
The Board currently consists of two Executive Directors, a Non-Executive Chairman,
and two Non-Executive Directors. Collectively the Board has scientific, financial, legal,
and business experience necessary to advance the Company and apply corporate
governance best practices.
The Board is satisfied with its composition and the balance between Executive
and Non-Executive Directors. These are:
Dr Kevin Cox (Independent Non-Executive Chairman)
Dr Suzanne Dilly (Chief Executive Officer)
Gerry Desler (Executive Chief Financial Officer)
Martin Lampshire (Independent Non-Executive Director)
Stella Panu (Independent Non-Executive Director)
Role of the CEO
• Leads and manages the day-to-day running of the Group’s business in accordance
with the business plans and within the budgets approved by the Board;
• Leads the management to ensure effective working relationships with the Board
by meeting or communicating on a regular basis to review key developments,
issues, opportunities and concerns;
• Develops and proposes the Group’s strategies and policies for the Board’s
consideration;
• Implements, with the support of the management team, the strategies and policies
as approved by the Board and its committees in pursuit of the Group’s objectives;
• Maintains regular dialogue with the Chairman on important and strategic issues
facing the Group, and ensures bringing these issues to the Board’s attention;
• Ensures that the management gives appropriate priority to providing reports to
the Board which contain relevant, accurate, timely and clear information necessary
for the Board to fulfil its duties;
• Ensures that the Board is alerted to forthcoming complex, contentious or sensitive
issues affecting the Group;
• Leads the communication programme with stakeholders including shareholders;
• Conducts the affairs of the Group in accordance with the practices and procedures
adopted by the Board and promotes the highest standards of integrity, probity
and corporate governance within the Group.
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Corporate Governance
for the year ended 31 December 2022
5. Maintain the board
as a well-functioning,
balanced team led by
the chair (Cont.)
How the Company complies
Role of the Non-Executive Directors
As members of the Board, all Non-Executive directors have key accountabilities,
which include the following:
• Provision of leadership of the Company within a framework of prudent and
effective controls, which enable risk to be assessed and managed;
• Setting the Company’s strategic aims, ensure that the necessary financial and
human resources are in place for the Company to meet its objectives, and review
management performance;
• Setting the Company’s values and standards and ensure that its obligations to
shareholders are understood and met;
• Constructively challenge and help develop strategy, participate actively in the
decision-making process of the Board, and scrutinise the performance of
management in meeting agreed goals and objectives
Independence
As recommended in the UK Corporate Governance Code, the Board will identify in
the annual report each Non-Executive Director it considers to be independent.
The Board will determine whether the Director is independent in character and
judgement and whether there are relationships or circumstances which are likely to
affect, or could appear to affect, the Director’s judgement. The Board will state its
reasons if it determines that a Director is independent notwithstanding the existence
of relationships or circumstances which are relevant to its determination, including if
the Director:
• Has been an employee of the Company or group within the last five years;
• Has, or has had within the last three years, a material business relationship with
the Company either directly, or as a Director or senior employee of a body that has
such a relationship with the Company;
• Has received or receives additional remuneration from the Company apart from a
Director’s fee;
• Has close family ties with any of the Company’s advisers, directors or senior
employees;
• Holds cross-directorships or has significant links with other directors through
involvement in other companies or bodies; or
• Has served on the Board for more than nine years form the date of their first
election.
Role of the Board Committees
The Board has established three committees: remuneration, audit and risk and
nomination and governance. All of these committees have terms of reference,
which set out clearly their role, stating whether it is to take decisions or make
recommendations to the Board of Directors. These are available on the Company’s
website (See below).
Biographical details of the Directors & Management can be found on the Company’s
website at https://www.valirx.com/board-directors-and-management-team
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ValiRx Plc
CONNECTED INNOVATION
Corporate Governance
for the year ended 31 December 2022
Principle
How the Company complies
6. Ensure that between
them the Directors
have the necessary
up-to-date experience,
skills and capabilities
ValiRx seeks to recruit the best candidates at Board level and considers candidates
on merit and against objective criteria and with due regard for the benefits of
diversity on the Board (including gender), taking care that appointees have the
necessary experience and time available to allocate to the position. Each Director
appointed by the Board is subject to election by the shareholders at the first AGM
after their appointment. Following advice from the Nomination and Governance
Committee, the Board has concluded that each Director is qualified for election or
re-election.
The current Board members are individuals with extensive industry-specific
experience as well as professionals that bring to the Board the skill sets required
to meet its strategic, operational and compliance objectives. Their suitability as
Directors has therefore been determined largely on the basis of their ability to
deliver outcomes in accordance with the Company’s short and longer-term
objectives and thus add value to shareholders.
7. Evaluate board
performance based
on clear and relevant
objectives, seeking
continuous
improvement
ValiRx considers that assessments of the performance of the Board, the Board
committees, the Chief Executive, the Company Secretary and each of the individual
Non-Executive Directors are pivotal to good corporate governance, bringing
significant benefits and performance improvements on three levels: organisational;
board and individual member level. Establishing an effective process for board
evaluation sends a positive signal to the organisation that board members are
committed to acting professionally.
Performance assessments are conducted annually across the board, applying a
matrix of key areas of focus to identify collective and individual strengths and
weaknesses within the Company for continuous improvement.
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ValiRx Plc
CONNECTED INNOVATION
Corporate Governance
for the year ended 31 December 2022
7. Evaluate board
performance based
on clear and relevant
objectives, seeking
continuous
improvement (Cont.)
How the Company complies
Board Composition
• Appropriate ratio between Executive and Independent Directors;
• Awareness of social, professional and legal responsibilities at individual, company
and community level; ability to identify independence conflicts; applies sound
professional judgement; identifies when external counsel should be sought; up
holds Board confidentiality; respectful in every situation.
• Effective in working within defined corporate communications policies; makes
constructive and precise contribution to the Board both verbally and in written
form;
• Negotiation skills to engender stakeholder support for implementing Board
decisions; and
• Experienced with the mechanisms, controls and channels to deliver effective
governance and manage risks.
Effectiveness of the Board of Directors in:
• Monitoring financial performance against agreed financial objectives;
• Monitoring the implementation of the strategy approved by the Board;
• Appointing, removing and monitoring the performance of the Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer and Company Secretary;
• Ensuring appropriate succession planning for Board members and senior
management via the Nomination and Governance Committee;
• Approving and monitoring financial and other reporting;
• Approving and monitoring major capital expenditure, capital management,
funding, acquisitions and divestments;
• Overseeing risk management, control, accountability and compliance systems;
• Setting standards of behaviour to enhance the reputation of the Company in the
market and the community;
• Ensuring proper organisation and management so as to achieve conformity goals
across all aspects of the business;
• Setting appropriate delegated powers between CEO and Board of Directors;
• Ensuring quality and continuity of relations with the Group CEO, members of
Committees, managers and heads of control functions; and
• Setting clear strategy for the Company reflecting goals short to mid-long term.
Effectiveness of Executive Management in:
• Implementing the strategic objectives set by the Board;
• Operating within the risk parameters set by the Board;
• Operational and business management of the Company;
• Managing the Company’s reputation and operating performance in accordance
parameters set by the Board;
• The day-to-day running of the Company;
• Providing the Board with accurate, timely and clear information to enable the
Board to perform its responsibilities;
• Interfacing with shareholders and stakeholders, Nomad and Broker; and
• Approving capital expenditure (except acquisitions) within delegated authority
levels.
Structure and competency of Committees to:
• Advise the Board on the suitability of external auditors and critical accounting
policies for financial reports, in particular YE audited accounts, and the Company’s
risk management and internal control systems;
• Provide independent and transparent pay arrangements linked to achievements
over a given period; and
• Lead the Board appointment and succession planning process considering the
requirements of the Company.
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Corporate Governance
for the year ended 31 December 2022
Principle
How the Company complies
8. Promote a corporate
culture that is based
on ethical values and
behaviours
The Board understands the importance of setting the right culture for a
biotechnology oncology-focused company specialising in developing novel
treatments for cancer that will provide a breakthrough into human health and
wellbeing through the early detection of cancer and its therapeutic intervention.
Moreover, it ensures that the Company’s strategies and requirements for excellence
and good governance are instilled into the culture of our business. The Executive
Directors interface regularly with all personnel within ValiRx. In this way we
encourage them to take responsibility for advancing their projects within
parameters and controls set by the Board. This approach creates a culture that
motivates and enables our personnel to develop and express their talents and skills.
Moreover, in the performance of its duties the Board listens to the views of key
stakeholders, including scientists, clinicians, regulators and suppliers and is mindful
of the potential impacts of decisions it makes.
9. Maintain governance
structures and
processes that are
fit for purpose and
support good
decision-making by
The Board of Directors, with the support of the Executive Management and
Committees, is ultimately responsible for establishing and maintaining good
standards of governance. This can be achieved by creating conditions that enhance
overall Board’s and individual Directors’ effectiveness in order that all key issues are
addressed, and sound decisions are taken in a timely manner.
the Board
Other responsibilities of the Board of Directors include:
• Promoting effective relationships and open communication, and creating an
environment that allows constructive debates and challenges, both inside and
outside the boardroom, between Non-Executive Director(s) and the management;
• Ensuring that the Board as a whole plays a full and constructive part in the
development and determination of the Group’s strategies and policies, and that
Board decisions taken are in the Group’s best interests and fairly reflect Board’s
consensus;
• Setting, in consultation with the Chief Executive and Company Secretary, the Board
meeting schedule and agenda to take full account of the important issues facing
the Group and the concerns of all Directors, and ensures that adequate time is
available for thorough discussion of critical and strategic issues;
• Ensuring that the strategies and policies agreed by the Board are effectively
implemented by the Chief Executive and the management; and
• Ensuring that there is effective communication with shareholders, and that each
Director develops and maintains an understanding of the stakeholders’ views.
The Board recognises the importance of sound corporate governance.
The Board is satisfied with its composition. The Non-Executive Directors bring a wide
range of skills and experience to the Company, as well as independent judgment on
strategy, risk and performance. The independence of each Non-Executive Director is
assessed at least annually, and both are considered to be independent at the date
of this report.
10. Communicate how
the Company is
governed and is
performing by
maintaining a
dialogue with
shareholders and
other relevant
stakeholders
Attendance at Board meetings
A minimum of ten (10) Board meetings are held each year at which it is expected that
all Directors attend in addition to relevant Committee meetings, General
Meetings and the Annual General Meeting.
Where Directors are unable to attend meetings due to conflicts in their schedules,
they will receive the papers scheduled for discussion in the relevant meetings, giving
them the opportunity to relay any comments to board members in advance of the
meeting. Directors are required to leave the meeting where matters relating to them,
or which may constitute a conflict of interest to them, are being discussed.
The number of Board Meetings attended by each Director during the year was:
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Corporate Governance
for the year ended 31 December 2022
10. Communicate how
the Company is
governed and is
performing by
maintaining a
dialogue with
shareholders and
other relevant
stakeholders (Cont.)
How the Company complies
Director
Kevin Alexander (re-signed 30/06/22)
Gerry Desler
Martin Lampshire
Dr Suzy Dilly
Dr Kevin Cox
Stella Panu (appointed 11/10/22)
Number of meetings held
whilst a board member
Number of meetings
attended
6
12
12
12
12
3
6
12
12
12
12
3
Matters reserved for the Board
• Approval of the Group vision, values and overall governance framework;
• Approval of the Company’s Annual Report and Accounts and Half Yearly Financial
Statements;
• Approval of Group financial policy;
• Approval to enter into discussions with Biotech companies reference potential
joint-partnering projects or licensing of Company’s pre-clinical and clinical assets;
• Approval of the Company’s long-term finance plan and annual capital budget;
• Approval of any significant change in Group accounting policies or practices;
• Approval of all circulars, listing particulars, resolutions and corresponding
documentation sent to shareholders;
• Establishing committees of the Board, approving their terms of reference (including
membership and financial authority), reviewing their activities and, where
appropriate, ratifying their decisions;
• Approval of this schedule of Matters Reserved to the Board.
The Board is responsible to the Company’s shareholders with its main objective to
increase the value of assets and long-term sustainability of the Company. The Board
reviews business opportunities and determines the risks and control framework.
It also makes decisions on budgets, Group strategy and major capital expenditure.
The day-to day management of the business is delegated to the Executive Directors.
The Board meets monthly with agendas, Committee papers and other appropriate
information distributed prior to each meeting to allow the Board to meet its duties.
Effective procedures are in place to deal with conflicts of interest. The Board knows
other interests and commitments of Directors and any changes to their commitments
are reported.
In addition to the Executive Committee, the Board has established a Remuneration
Committee, an Audit and Risk Committee, and a Nomination and Governance
Committee, which also report into ValiRx’s Board.
The Executive Committee is in charge of the daily management of the Group and is
mandated to prepare and plan the overall policies and strategies of the Company for
approval by the Board. It may approve intra-group transactions, provided that they
are consistent with the consolidated annual budget of the Company, as well as
specific transactions with third parties provided that the cost per transaction is within
specified spending limits. It informs the Board at its next meeting on each such
transaction.
Prior to the beginning of each fiscal year, the Executive Committee submits to the
Board those measures that it deems necessary to be taken in order to meet the
objectives of the Company and a consolidated budget for approval.
This committee comprises:
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ValiRx Plc
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Corporate Governance
for the year ended 31 December 2022
10. Communicate how
the Company is
governed and is
performing by
maintaining a
dialogue with
shareholders and
other relevant
stakeholders (Cont.)
How the Company complies
Dr Suzy Dilly (Chief Executive Officer)
Gerry Desler (Executive Chief Financial Officer)
The Audit and Risk Committee meets at least twice per annum and is responsible
for assisting the Board in carrying out its oversight responsibilities in relation to
corporate policies, risk management, internal control, internal and external audit
and financial and regulatory reporting practices. The Committee has an oversight
function, providing a link between the external auditors and the Board; it also
determines the terms of engagement of the Company’s auditors. The current
members of the Audit and Risk Committee are:
Gerry Desler (Executive Chief Financial Officer)
Dr Suzy Dilly (Chief Executive Officer)
The Remuneration Committee meets at least twice per annum to determine and
agree with the Board the framework or broad policy for the remuneration of
executive directors of the Company and advises on the overall remuneration policies
applied throughout the Company. The objective of this committee is to attract,
retain and motivate executives capable of delivering the Company’s objectives.
Agreed personal objectives and targets including financial and non-financial metrics
are set each year for the executive directors and other per-sonnel and performance
measured against these metrics. The committee is made up of Non-Executive
Director(s), namely:
Dr Kevin Cox (Non-Executive Chairman)
Martin Lampshire (Non-Executive Director)
Stella Panu (Non-Executive Director)
The Chief Executive Officer is consulted on remuneration packages and policy but
does not attend discussions regarding her own package. The Board determines
the remuneration and terms and conditions of the appointment of Non-Executive
Directors.
The Nomination Committee is a sub-committee of the whole Board responsible
for the selection and proposal to the Board of suitable candidates for appointment
as Executive and Non-Executive Director(s). The Committee may engage external
search consultants to identify candidates for Board vacancies before recommending
a preferred candidate to the Board for consideration. The Committee comprises:
Dr Kevin Cox (Non-Executive Chairman)
Gerry Desler (Executive Chief Financial Officer)
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Report of the Directors
for the year ended 31 December 2022
The Directors present their report and financial statements for the year ended 31 December 2022.
DIVIDENDS
No dividends will be distributed for the year ended 31 December 2022.
RESEARCH AND DEVELOPMENT
The Group will continue its policy of investment in research and development. In accordance with
International Financial Reporting Standards (IFRS), during the year the Group expensed to the income
statement £551,233 (2022: £303,789) on research and development. Further details on the Group’s research
and development are included in the Chief Executive’s Report on page 6.
FUTURE DEVELOPMENTS
Details of future developments can be found in the Strategic Report on pages 7 to 22.
DIRECTORS
The Directors shown below have held office during the whole of the period from 1 January 2022 to the date
of this report.
K J Alexander (resigned 30 June 2022)
G Desler
M Lampshire
Dr S J Dilly
Dr K Cox
S Panu (appointed 11 October 2022)
DIRECTORS SHAREHOLDINGS
The Directors of the Company held the following beneficial interests in the ordinary shares of the Company
at the balance sheet date:
K J Alexander (resigned 30 June 2022)
G Desler
M Lampshire
Dr S Dilly
Dr K Cox
S Panu (appointed 11 October 2022)
2022
No. of shares
N/A
128,668
144,000
416,668
372,333
-
2021
No. of shares
250,833
103,668
44,000
316,668
272,333
N/A
DIRECTORS’ SHARE OPTIONS
The Directors of the Company held share options granted under the Company share option scheme,
as indicated below. No share options were exercised during the year. Full details of the share options
held are disclosed in note 25 to the financial statements.
K J Alexander (resigned 30 June 2022)
G Desler
M Lampshire
Dr S Dilly
Dr K Cox
S Panu (appointed 11 October 2022)
2022
No. of shares
N/A
223,950
150,000
604,752
500,000
150,000
2021
No. of shares
23,950
23,950
-
4,752
-
N/A
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ValiRx Plc
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Report of the Directors
for the year ended 31 December 2022
COMPANY SHARE PRICE
The market value of the Company’s shares at 31 December 2022 was 14.00p and the high and low
share prices during the period were 38.00p and 10.15p respectively.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Note 26 to the financial statements gives details of the Group’s objectives and policies for
risk management of financial instruments.
SIGNIFICANT SHAREHOLDERS
As at 1st June 2023, so far as the Directors are aware, the following shareholders held more than 3% of
the Company’s issued share capital:
Number of shares
% of issued share capital held
Monecor (London) Limited
Adam Hargreaves
4,466,969
7,749,163
4.37%
7.57%
DIRECTORS’ INSURANCE
The Directors and Officers of the Company are insured against any claims against them for any wrongful act in
their capacity as a Director, officer or employee of the Group, subject to the terms and conditions of the policy.
CREDITOR PAYMENT POLICY
The Company’s current policy concerning the payment of trade creditors is to:
• settle the terms of payment with suppliers when agreeing the terms of each transaction;
• ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in
contracts; and
• pay in accordance with the Company’s contractual and other legal obligations.
On average, trade creditors at the year-end represented 30 days’ purchases.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the Directors are aware, there is no relevant audit information (as defined by Section 418 of the
Companies Act 2006) of which the Group’s auditors are unaware, and each Director has taken all the steps
that he or she ought to have taken as a Director in order to make himself or herself aware of any relevant audit
information and to establish that the Group’s auditors are aware of that information.
AUDITORS
The auditors, Adler Shine LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.
ON BEHALF OF THE BOARD:
G Desler
Director, Chair Audit and Risk Committee
Date: 1st June 2023
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Statement of Directors’ Responsibilities
for the year ended 31 December 2022
The Directors are responsible for preparing the Strategic Report, Directors’ Report, Corporate Governance
Statement and the Group and Parent Company financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare Group and Parent Company financial statements for each
financial year. The Directors are required by the AIM Rules of the London Stock Exchange to prepare
Group financial statements in accordance with UK adopted International Accounting Standards (“IAS”)
in conformity with the requirements of the Companies Act and have elected under company law to prepare the
Parent Company financial statements in accordance with UK adopted International Accounting Standards (“IAS”)
in conformity with the requirements of the Companies Act 2006.
The Group financial statements are required by law and UK adopted IAS to present fairly the financial position
and performance of the Group; the Companies Act 2006 provides in relation to such financial statements that
references in the relevant part of that Act to financial statements giving a true and fair view are references
to their achieving a fair presentation.
Under company law the Directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or loss of the
Group for that period. In preparing each of the Group and Parent Company financial statements the Directors
are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• for the Group financial statements, state whether they have been prepared in accordance with International
Accounting Standards in conformity with the requirements of the Companies Act, subject to any material
departures disclosed and explained in the financial statements;
• for the Parent Company financial statements, state whether they have been prepared in accordance with
International Accounting Standards in conformity with the requirements of the Companies Act, subject to any
material departure disclosed and explained in the Parent Company financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group and the Parent Company will continue in business; and
• prepare the financial statements in accordance with the rules of the London Stock Exchange for companies
trading securities on AIM.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Parent Company’s transactions and disclose with reasonable accuracy at any time the financial position
of the Parent Company and enable them to ensure that the financial statements comply with the requirements of
the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Parent
Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the financial statements contained therein. The Directors
are responsible for ensuring the annual report and the financial statements are made available on a website.
Financial statements are published on the Company’s website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial statements, which may vary from
legislation in other jurisdictions.
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ValiRx Plc
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Report of the Independent Auditors to the Members
of ValiRx Plc
Opinion
We have audited the financial statements of ValiRx Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’)
for the year ended 31 December 2022 which comprise the Group Statement of Comprehensive Income, the Group
and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statements of
Changes in Equity and the related notes, including a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable law and UK adopted International
Accounting Standards, as applied in accordance with section 408 of the Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs
as at 31 December 2022 and of the Group’s loss for the year then ended;
• the Group’s financial statements have been prepared in accordance with UK adopted International Accounting
Standards in conformity with the requirements of the Companies Act;
• the Parent Company financial statements have been properly prepared in accordance with UK adopted
International Accounting Standards in conformity with the requirements of the Companies Act 2006 and as
applied in accordance with section 408 of the Companies Act; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit
of the financial statements section of our report. We are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group and Parent Company’s ability to continue to adopt
the going concern basis of accounting included:
- Review of managements cashflow forecast and challenging assumptions used in forecasts;
- Review of the cash held by the Group, including a review of post year funds raised through the issue of new
shares, and assessing whether this will be sufficient to support the expected level of activities;
- Considering whether material uncertainties existed that could cast significant doubt on the Group’s ability to
continue as a going concern for at least 12 months after the date of approval of the financial statements;
- Considering the appropriateness of the model used to prepare forecasts; and
- Assessing the disclosures made within the financial statements.
Based on our assessment, we concluded that the assumptions used by management were reasonable overall and
the disclosures made within the financial statements were appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group and Parent Company’s ability
to continue as a going concern for a period of at least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit
strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
The key audit matters identified were:
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ValiRx Plc
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Report of the Independent Auditors to the Members
of ValiRx Plc
Impairment of goodwill and intangibles
Area of focus
The Group has goodwill of £1.60 million and intangible assets of £0.89 million.
IAS 36 requires at least annual impairment assessments in relation to goodwill, indefinite-lived intangible assets
and intangible assets that are not yet ready for use, with more regular assessment should an impairment trigger
be identified.
The determination of recoverable amount, being the higher of value-in-use and fair value less costs of disposal,
requires judgement on the part of management in identifying and then estimating the recoverable amount for the
relevant CGUs.
Recoverable amounts are based on management’s view of future cash flow forecasts and external market
conditions such as future pricing and the most appropriate discount rate.
Management engaged an expert to assist them in performing an annual impairment assessment which
included the assumptions and estimates around the success of the future development and commercialisation
of its products VAL 201 and VAL 401. Changes in these assumptions might give rise to a change in the carrying
value of intangibles and goodwill.
How our audit addressed the area of focus
We obtained the report prepared by the expert and gained an understanding of the key assumptions and
judgements underlying the assessment. We assessed the appropriateness of the methodology applied and
tested the mathematical accuracy of the models.
We obtained an understanding of the stage of product development and management’s expected timelines
for product commercialisation, including updates on the achievement of expected milestones.
We determined the judgement made by the Directors that no impairment was required, and that the
disclosures made in the financial statements to be reasonable.
Going concern
Area of focus
Refer to note 2 of the financial statements for the Directors’ disclosures of related accounting policies, judgements
and estimates. The Directors have concluded that they have a reasonable expectation that the Group will have
sufficient cash resources and cash inflows to continue its activities for not less than twelve months from the date
of approval of these financial statements and have therefore prepared these financial statements on a going
concern basis.
The Group had cash and cash equivalents of £1,137,477 as at 31 December 2022.
Management produces a cash flow forecast based on the board plans.
The key judgements within the cash flow forecast that we particularly focused on were:
• The continued availability of funding.
• The likely recovery of other receivables.
• Cash flows expected from research and development tax credits.
• Flexibility of development programme.
How our audit addressed the area of focus
We assessed the reasonableness and support for the judgments underpinning management’s forecast, as well as
the sensitivity of projections to these judgements.
We reviewed management’s financing plans and considered the reasonableness of the assumptions within
management’s proposed cost reduction actions, should future fund raisings be lower than anticipated.
Our conclusion on management’s use of the going concern basis of accounting is included in the going concern
section of the report above.
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ValiRx Plc
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Report of the Independent Auditors to the Members
of ValiRx Plc
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature,
timing and extent of our audit procedures and to evaluate the effects of misstatements, both individually and on
the financial statements as a whole. During planning we determined a magnitude of uncorrected misstatements
that we judge would be material for the financial statements as a whole (FSM). During planning FSM was
calculated as £192,000 based on 8% loss before tax and amortisation. We agreed with the Audit Committee
that we would report to them all unadjusted differences in excess of £5,000, as well as differences below those
thresholds that, in our view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
The audit was scoped to ensure that the audit team obtained sufficient and appropriate audit evidence in
relation to significant operations of the Group during the year ended 31 December 2022. This included the
performance of full statutory audits on each of the subsidiary undertakings. As part of our planning, we assessed
the risk of material misstatement including those that required significant auditor consideration at the
component and group level. Procedures were designed and performed to address the risk identified and for
the most significant assessed risks of material misstatement, the procedures performed are outlined above in
the key audit matters section of this report.
Other information
The Directors are responsible for the other information. The other information comprises the information in the
Annual Report but does not include the financial statements and our Report of the Auditors thereon.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements, or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Group Strategic Report and the Report of the Directors for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
• the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report
or the Report of the Directors.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
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ValiRx Plc
CONNECTED INNOVATION
Report of the Independent Auditors to the Members
of ValiRx Plc
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 35, the Directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the Directors determine necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or
the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes
our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud,
is detailed below.
We are not responsible for preventing irregularities. Our approach to identifying and assessing the risks of
material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations
included, but was not limited to, the following:
• the engagement partner ensured that the engagement team collectively had the appropriate competence,
capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
• we identified the laws and regulations applicable to the Group and Parent Company through discussions with
the Directors and other management, and from our commercial knowledge and experience of the medical
research and development sector;
• we focused on specific laws and regulations which we considered may have a direct material effect on the
financial statements or the operations of the Group and Parent Company, including the Companies Act 2006,
taxation legislation and data protection, anti-bribery, employment and health and safety legislation;
• we assessed the extent of compliance with the laws and regulations identified above through making enquiries
of management and inspecting legal correspondence; and
• identified laws and regulations were communicated within the audit team regularly and the team remained
alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the Group’s and the Parent Company’s financial statements to material
misstatement, including obtaining an understanding of how fraud might occur, by:
• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge
of actual, suspected and alleged fraud; and
• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and
regulations.
To address the risk of fraud through management bias and override of controls, we:
• performed analytical procedures to identify any unusual or unexpected relationships;
• tested journal entries to identify unusual transactions;
• assessed whether judgements and assumptions made in determining the accounting estimates were indicative
of potential bias; and
• investigated the rationale behind significant or unusual transactions.
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ValiRx Plc
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Report of the Independent Auditors to the Members
of ValiRx Plc
In response to the risk of irregularities and non-compliance with laws and regulations, we
designed procedures which included, but were not limited to:
• agreeing financial statement disclosures to underlying supporting documentation;
• reading the minutes of meetings of those charged with governance;
• enquiring of management as to actual and potential litigation and claims; and
• reviewing correspondence with HMRC, relevant regulators including the Health and Safety
Executive, and the Company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and
regulations are from financial transactions, the less likely it is that we would become aware of non-compliance.
Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations
to enquiry of the directors and other management and the inspection of regulatory and legal correspondence,
if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they
may involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our
Report of the Auditors.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members
those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Alexander Chrysaphiades FCA (Senior Statutory Auditor)
for and on behalf of Adler Shine LLP
Chartered Accountants & Statutory Auditor
Aston House
Cornwall Avenue
London
N3 1LF
Date: 1st June 2023
4 0
FINANC IAL
STATEMENTS
ValiRx Plc (Registered number: 03916791)
CONNECTED INNOVATION
Consolidated Statement of Profit or Loss and Other Comprehensive
Income for the year ended 31 December 2022
Continuing Operations
Other operating income
Research and developments
Administrative expenses
Share-based payment charge
Operating Loss
Finance costs
Loss Before Income Tax
Income tax credit
Loss After Income Tax
Non-controlling interest
Notes
2022
£
2021
£
-
(551,233)
(1,502,355)
(539,791)
26,952
(303,789)
(1,216,391)
(184,611)
6
7
8
(2,593,379)
(1,677,839)
(5,456)
(2,765)
(2,598,835)
(1,680,604)
192,671
133,413
(2,406,164)
(1,547,191)
39,676
28,979
Total Comprehensive Loss For The Year
Attributable To Shareholders
(2,366,488)
(1,518,212)
Loss Per Share - Basic And Diluted
10
(3.06p)
(2.34p)
4 2
ValiRx Plc (Registered number: 03916791)
CONNECTED INNOVATION
Consolidated Statement of Financial Position
31 December 2022
ASSETS
ASSETS
NON-CURRENT ASSETS
NON-CURRENT ASSETS
Goodwill
Goodwill
Intangible assets
Intangible assets
Property, plant and equipment
Property, plant and equipment
Right-of-use assets
Right-of-use assets
CURRENT ASSETS
Trade and other receivables
Tax receivable
Cash and cash equivalents
TOTAL ASSETS
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital
Share premium
Merger reserve
Reverse acquisition reserve
Share option reserve
Retained earnings
Non-controlling interests
TOTAL EQUITY
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Lease liabilities
CURRENT LIABILITIES
Trade and other payables
Borrowings
Lease liabilities
TOTAL LIABILITIES
Notes
11
12
13
20
2022
£
2021
£
1,602,522
903,900
-
5,561
1,602,522
1,108,116
-
13,278
2,511,983
2,723,916
15
16
133,815
192,671
1,137,477
72,925
133,413
593,672
1,463,963
800,010
3,975,946
3,523,926
17
9,695,120
26,772,630
637,500
602,413
986,816
(34,643,639)
9,669,995
24,490,618
637,500
602,413
491,219
(32,292,507)
4,050,840
(224,539)
3,599,238
(184,867)
3,826,301
3,414,371
19
20
22,070
-
35,654
5,681
22,070
41,335
18
19
20
111,933
9,962
5,680
50,835
9,627
7,758
127,575
149,645
68,220
109,555
TOTAL EQUITY AND LIABILITIES
3,975,946
3,523,926
The financial statements were approved by the Board of Directors on 1st June 2023 and were signed on its behalf by:
G Desler - Director
4 3
ValiRx Plc (Registered number: 03916791)
CONNECTED INNOVATION
Company Statement of Financial Position
31 December 2022
ASSETS
NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
Right-of-use assets
Investments
CURRENT ASSETS
Trade and other receivables
Tax receivable
Cash and cash equivalents
Notes
2022
£
12
13
20
14
40,000
-
5,561
3,615,869
2021
£
60,000
-
13,278
3,615,863
3,661,430
3,689,141
15
16
3,455,835
192,671
1,134,289
3,327,416
133,413
592,046
4,782,795
4,052,875
TOTAL ASSETS
8,444,225
7,742,016
EQUITY
SHAREHOLDERS’ EQUITY
Called up share capital
Share premium
Merger reserve
Share option reserve
Retained earnings
TOTAL EQUITY
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Lease liabilities
CURRENT LIABILITIES
Trade and other payables
Borrowings
Lease liabilities
TOTAL LIABILITIES
17
9,695,120
26,772,630
637,500
986,816
(30,241,768)
9,669,995
24,490,618
637,500
491,219
(28,101,166)
7,850,298
7,188,166
19
20
22,070
-
35,654
5,681
22,070
41,335
18
19
20
556,215
9,962
5,680
495,130
9,627
7,758
571,857
593,927
512,515
553,850
TOTAL EQUITY AND LIABILITIES
8,444,225
7,742,016
The financial statements were approved by the Board of Directors on 1st June 2023 and were signed on its behalf by:
G Desler - Director
4 4
ValiRx Plc
CONNECTED INNOVATION
Consolidated Statement of Changes in Equity
for the year ended 31 December 2022
Share capital
£
Share premium
£
Notes
Merger
reserve
£
Reserve
acquisition
reserve
£
Balance at 1 January 2021
Changes in equity
Loss for the year
Issue of shares
Lapse of share options and warrants
Movement in year
9,669,828
24,380,356
637,500
602,413
-
167
-
-
-
21,500
88,762
-
-
-
-
-
-
-
-
-
Balance at 31 December 2021
9,669,995
24,490,618
637,500
602,413
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Lapse of share options and warrants
Movement in year
-
25,125
17
-
-
-
2,462,250
(209,076)
28,838
-
-
-
-
-
-
-
-
-
-
-
Balance at 31 December 2022
9,695,120
26,772,630
637,500
602,413
Balance at 1 January 2021
Changes in equity
Loss for the year
Issue of shares
Lapse of share options and warrants
Movement in year
Share based
payment
reserve
£
Non-
controlling
interest
£
Retained
earnings
£
Total
£
540,803
(155,888)
(30,919,728)
4,755,284
-
-
(234,195)
184,611
(28,979)
-
-
-
(1,518,212)
-
145,433
-
(1,547,191)
21,667
-
184,611
Balance at 31 December 2021
491,219
(184,867)
(32,292,507)
3,414,371
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Lapse of share options and warrants
Movement in year
-
-
-
(44,194)
539,791
(39,676)
-
-
-
4
(2,366,488)
-
-
15,356
-
(2,406,164)
2,487,375
(209,076)
-
539,795
Balance at 31 December 2022
986,816
(224,539)
(34,643,639)
3,826,301
Reverse acquisition reserve
The reverse acquisition reserve exists as a result of the method of accounting
for the acquisition of ValiRx Bioinnovation Limited and ValiPharma Limited.
4 5
ValiRx Plc
CONNECTED INNOVATION
Company Statement of Changes in Equity
for the year ended 31 December 2022
Balance at 1 January 2021
Changes in equity
Loss for the year
Issue of shares
Lapse of share options
Movement in year
Notes
Share capital
£
Share premium
£
Merger
reserve
£
9,669,828
24,380,356
637,500
-
167
-
-
-
21,500
88,762
-
-
-
-
-
Balance at 31 December 2021
9,669,995
24,490,618
637,500
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Lapse of share options and warrants
Movement in year
17
-
25,125
-
-
-
-
2,462,250
(209,076)
28,838
-
-
-
-
-
-
Balance at 31 December 2022
9,695,120
26,772,630
637,500
Balance at 1 January 2021
Changes in equity
Loss for the year
Issue of shares
Lapse of share options
Movement in year
Share based
payment
reserve
£
Retained
earnings
£
Total
£
540,803
(26,931,101)
8,297,386
-
-
(234,195)
184,611
(1,315,498)
-
145,433
-
(1,315,498)
21,667
-
184,611
Balance at 31 December 2021
491,219
(28,101,166)
7,188,166
Changes in equity
Loss for the year
Issue of shares
Costs of shares issued
Lapse of share options and warrants
Movement in year
-
-
-
(44,194)
539,791
(2,155,958)
-
-
15,356
-
(2,155,958)
2,487,375
(209,076)
-
539,791
Balance at 31 December 2022
986,816
(30,241,768)
7,850,298
Share capital
The nominal value of the issued share capital.
Share premium account
Amounts received in excess of the nominal value on the issue of share capital less any costs associated with the issue of shares.
Merger reserve
The difference between the nominal value of the share capital issued by the Company and the fair value of
ValiRx Bioinnovation at the date of acquisition.
Share option reserve
The fair value of the share-based payment, determined at the grant date, and expensed over the vesting period.
Retained earnings
Accumulated comprehensive income for the year and prior periods.
4 6
CONNECTED INNOVATION
Consolidated Statement of Cash Flows
for the year ended 31 December 2022
Cash flows from operations
Cash outflow from operations
Interest paid
Tax credit received
Notes
1
2022
£
2021
£
(1,841,443)
(4,215)
133,413
(1,331,136)
(782)
71,346
Net cash outflow from operating activities
(1,712,245)
(1,260,572)
Cash flows from financing activities
Bank loan repayment
Repayment of lease liabilities
Share issue
Costs of shares issued
(13,249)
(9,000)
2,487,375
(209,076)
(5,324)
(9,000)
21,667
-
Net cash inflow from financing activities
2,256,050
7,343
Increase/(decrease) in cash and cash equivalents
543,805
(1,253,229)
Cash and cash equivalents at beginning of year
Cash an cash equivalents at end of year
2
2
593,672
1,846,901
1,137,477
593,672
4 7
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Statement of Cash Flows
for the year ended 31 December 2022
1. Reconciliation Of Operating Loss To Cash Generated From Operations
Operating loss
Amortisation and impairment of intangible assets
Depreciation of right-of-use assets
Increase in trade and other receivables
Increase/(decrease) in trade and other payables
Share-based payments charge
2022
£
2021
£
(2,593,379)
204,216
7,717
(60,886)
61,098
539,791
(1,677,839)
221,072
7,717
(6,190)
(60,507)
184,611
Net cash outflow from operations
(1,841,443)
(1,331,136)
2. Cash And Cash Equivalents
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in
respect of these Statement of Financial Position amounts:
Cash and cash equivalents
1,137,477
593,672
31 December
2022
£
1 January
2022
£
Cash and cash equivalents
593,672
1,846,901
31 December
2021
£
1 January
2021
£
4 8
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
1. STATUTORY INFORMATION
ValiRx Plc is a company incorporated in the United Kingdom, which is listed on the AIM market of the
London Stock Exchange Plc. The address of its registered office is Stonebridge House, Chelmsford Road,
Hatfield Heath, CM22 7BD.
The registered number of the Company is 03916791.
The principal activity of the Group is the development of oncology therapeutics and companion diagnostics.
The presentation currency of the financial statements is the Pound Sterling (£).
2. ACCOUNTING POLICIES
Basis of preparation
The Group’s financial statements have been prepared in accordance with UK adopted International Accounting
Standards in conformity with the requirements of the Companies Act 2006 as they apply to the financial
statements of the Group for the year ended 31 December 2022. The principal accounting policies adopted by
the Group and by the Company are set out in note 2. The Group financial statements have been prepared under
the historical cost convention or fair value where appropriate.
The Group financial statements have been prepared under the historical cost convention or fair value
where appropriate.
Going concern
As part of their going concern review the Directors have followed the guidelines published by the Financial
Reporting Council entitled “Guidance on the Going Concern Basis of Accounting and Reporting on Solvency Risks
- Guidance for directors of companies that do not apply the UK Corporate Governance Code”.
The Group and Parent Company are subject to a number of risks similar to those of other development stage
pharmaceutical companies. These risks include, amongst others, generation of revenues in due course from the
development portfolio and risks associated with research, development, testing and obtaining related
regulatory approvals of its pipeline products. Ultimately, the attainment of profitable operations is dependent
on future uncertain events which include obtaining adequate financing to fulfil the Group’s commercial and
development activities and generating a level of revenue adequate to support the Group’s cost structure.
The current economic environment is challenging, and the Group has reported an operating loss for the year.
These losses are expected to continue in the current accounting year to 31 December 2023.
The Directors have prepared detailed financial forecasts and cash flows looking beyond 12 months from the
date of the approval of these financial statements. In developing these forecasts, the Directors have made
assumptions based upon their view of the current and future economic conditions that are expected to prevail
over the forecast period. The Directors estimate that the cash of £1,137,477 held by the Group as at 31 December
2022 together with cash received in January 2023 will be sufficient to support the current level of activities for
at least the next 12 months. The Directors are continuing to explore sources of finance available to the Group
and based upon initial discussions with a number of existing and potential investors they have a reasonable
expectation that they will be able to secure sufficient cash inflows for the Group to continue its activities beyond
the 12 months from the date of approval of these financial statements.
The Company carries out regular fund-raising exercises in order that it can provide the necessary working
capital for the Group. Further funds may be required to finance the Group’s work programme. The Board expects
to continue to raise additional funding as and when required to cover the Group’s development, primarily from
the issue of further shares.
In January 2023, the Company raised approximately £1.3m, before expenses, through the issue of new ordinary
shares.
In the event that additional financing is not secured when it is required, the Group would need to consider:
• reducing and/or deferring discretionary spending on one or more research and development programmes;
and/or
• restructuring operations to change its overhead structure.
4 9
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
2. ACCOUNTING POLICIES - continued
Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and all its subsidiaries
(“the Group”). Subsidiaries include all entities over which the Group has the power to govern financial and
operating policies. The existence and effect of potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Group controls another entity. Subsidiaries are
consolidated from the date on which control commences until the date that control ceases. Intra-group
balances and any unrealised gains and losses on income or expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
On 3 October 2006, ValiRx Bioinnovation Limited (‘Bioinnovation’) acquired 60.28% of the issued share capital
of ValiPharma Limited (‘ValiPharma’) in exchange for shares in Bioinnovation. Concurrently, the Company,
(“ValiRx”), acquired the entire issued share capital of Bioinnovation in a share for share transaction. As a result
of these transactions, the former shareholders of ValiPharma became the majority shareholders in ValiRx.
Accordingly, the substance of the transaction was that ValiPharma acquired ValiRx in a reverse acquisition.
Under IFRS 3 “Business Combinations”, the acquisition of ValiPharma has been accounted for as a reverse
acquisition.
In May 2008 the Company acquired the remaining 39.72% of the issued share capital of ValiPharma, which
is now wholly owned by the Group. This acquisition was accounted for using the acquisition method of
accounting.
In November 2013 ValiSeek Limited was formed to enable the Company to enter into a joint venture
agreement. The Company has a 55.5% holding in the issued share capital of ValiSeek.
In October 2022 the Company acquired 60% of the issued share capital of Cytolytix Limited.
Goodwill
Goodwill on acquisition of subsidiaries represents the excess of the cost of acquisition over the fair value of
the Group’s share of the identifiable net assets and contingent liabilities acquired. Identifiable assets are
those which can be sold separately, or which arise from legal rights regardless of whether those rights are
separable. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised
but is tested annually, or when trigger events occur, for impairment and is carried at cost less accumulated
impairment losses.
Other intangible assets
Acquired licences, trademarks and patents and directly associated costs are capitalised at cost and are
amortised on a straight-line basis over their useful life. Patents are amortised over 11 years and licences
between 10 and 20 years.
Impairment of non-current assets
At each reporting date, the Directors review the carrying amounts of property, plant and equipment assets,
goodwill and other intangible assets to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Directors estimate the recoverable amount of the
cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to
sell and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable
amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised as an expense immediately.
5 0
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
2. ACCOUNTING POLICIES - continued
Property, plant and equipment
Property, plant and equipment are stated at cost less depreciation.
Depreciation is provided at the following rates per annum to write off the cost of property, plant and
equipment, less estimated residual value, on a straight-line basis from the date on which they are brought
into use:
Plant and machinery
Computer equipment
33% per annum straight line
33% per annum straight line
Leases and right-of-use assets
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group
recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in
which it is the lessee, except for short-term leases (leases with a lease term of 12 months or less) and leases
of low value assets (e.g. tablets and personal computers, small items of office furniture). For these leases,
the Group recognises the lease payments as an operating expense on a straight-line basis over the term of
the lease.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily
determined, the Group uses its incremental borrowing rate. The lease liability is subsequently measured by
increasing the carrying amount to reflect interest on the lease liability (using the effective interest method)
and by reducing the carrying amount to reflect the lease payments made.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments
made at or before the commencement day, less any lease incentives received, initial direct costs and the
estimated costs of removing or dismantling the underlying asset per the conditions of the contract. They are
subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are
depreciated over the shorter period of lease term and useful life of the right-of-use asset.
Financial assets
The Company classifies its financial assets in the following categories:
- financial assets at fair value through profit or loss;
- loans and receivables;
- held-to-maturity investments; and
- available-for-sale financial assets.
Management determines the classification of its investments at initial recognition.
Loans and receivables
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. The principal financial assets of the Company are loans and receivables. They are included
in current assets, except for maturities greater than twelve months after the balance sheet date. These are
classified as non-current assets.
The Group’s loans and receivables are recognised and carried at the lower of their original amount less a
provision for impairment. A provision is made when collection of the full amount is no longer considered
possible.
The Group’s loans and receivables comprise trade and other receivables and cash and cash equivalents.
Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand and short-term deposits with an original
maturity of three months or less. The Company considers overdrafts (repayable on demand) to be an integral
part of its cash management activities and these are included in cash and cash equivalents for the purposes
of the cash flow statement.
Derivative financial instruments
Derivative financial instruments are initially recognised at fair value on the date a derivative contract is
entered into and are subsequently carried at fair value with the changes in fair value recognised in the
Income Statement.
5 1
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
2. ACCOUNTING POLICIES - continued
Financial liabilities
The Group does not have any financial liabilities that would be classified as fair value through the profit or loss.
Therefore, all financial liabilities are classified as other financial liabilities.
The Group’s financial liabilities include borrowings, trade and other payables and are recognised at their
original amount.
Finance income and finance costs
Finance income is recognised when it is probable that the economic benefits will flow to the Company and
the amount of income can be measured reliably. It is accrued on a time basis by reference to the principal
outstanding and at the effective interest rate applicable.
Borrowing costs are recognised as an expense in the period in which they are incurred.
Taxation
The taxation charge represents the sum of current tax and deferred tax.
The tax currently payable is based on the taxable profit for the period using the tax rates that have been
enacted or substantially enacted by the balance sheet date. Taxable profit differs from the net profit as
reported in the income statement because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the Group financial statements. Deferred tax is
determined using tax rates that have been enacted or substantially enacted at the balance sheet date and
are expected to apply when the related deferred income tax asset is realised of the deferred tax liability
is settled.
Deferred tax assets are only recognised to the extent that it is probable that future taxable profit will be
available against which the asset can be utilised.
Deferred tax is charged or credited in the income statement, except when it relates to items charged or
credited to equity, in which case the deferred tax is also dealt with in equity.
Research and development
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
All on-going development expenditure is currently expensed in the period in which it is incurred. Due to the
regulatory and other uncertainties inherent in the development of the Group’s programmes, the criteria for
development costs to be recognised as an asset, as prescribed by IAS 38, ‘Intangible assets’, are not met
until the product has been submitted for regulatory approval, such approval has been received and it is
probable that future economic benefits will flow to the Group. The Group does not currently have any such
internal development costs that qualify for capitalisation as intangible assets.
Development costs are capitalised when the related products meet the recognition criteria of an internally
generated intangible asset, the key criteria being as follows:
- technical feasibility of the completed intangible asset has been established;
- it can be demonstrated that the asset will generate probable future economic benefits;
- adequate technical, financial and other resources are available to complete the development;
- the expenditure attributable to the intangible asset can be reliably measured; and
- the Group has the ability and intention to use or sell the asset.
Expenses for research and development include associated wages and salaries, material costs, depreciation
on non-current assets and directly attributable overheads.
All research and development costs, whether funded by third parties under licence and development
agreements or not, are included within operating expenses and classified as such.
Share capital
Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the
definition of a financial liability. The Group’s ordinary and deferred shares are classified as equity instruments.
5 2
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
2. ACCOUNTING POLICIES - continued
Foreign currencies
Items included in the Financial Statements are measured using the currency of the primary economic
environment in which the Company and its subsidiaries operate (the functional currency) which is
UK sterling (£). The Financial Statements are accordingly presented in UK sterling.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions or at an average rate for a period if the rates do not fluctuate significantly.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the Consolidated Statement of Comprehensive income. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated.
Share-based payments
IFRS 2 “Share-based Payments” requires that an expense for equity instruments granted is recognised in the
financial statements based on their fair values at the date of the grant. This expense, which is in relation to
employee share options, is recognised over the vesting period of the scheme. The fair value of employee
services is determined by reference to the fair value of the awarded grant calculated using the
Black Scholes model.
At the year-end date, the Group revises its estimate of the number of share incentives that are expected to
vest. The impact of the revisions of original estimates, if any, is recognised in the Statement of Comprehensive
Income, with a corresponding adjustment to equity, over the remaining vesting period.
When options expire or are cancelled the expensed value of these lapsed options is transferred from the
share-based payment, reserve to retained earnings.
New and amended standards and interpretations
As at the date of approval of these financial statements, the following standards were in issue but not yet
effective. These standards have not been adopted early by the Company as they are not expected to have
a material impact on the financial statements other than requiring additional disclosure or alternative
presentation.
IFRS 4
IAS 1
IAS 1, IFRS Practice
Statement 2
IAS 8
IAS 12
IFRS 16
IAS 1
Amendments - Applying IFRS 9 ‘Financial Instruments’ with
IFRS 4 ‘Insurance Contracts’
Effective date (period
beginning on or after)
01/01/2023
Amendment - Classification of Liabilities as Current or Non-Current
01/01/2023
Amendment - Disclosure of accounting policies
01/01/2023
Amendment - Definition of Accounting estimates
Amendment - Deferred Taxation related to Assets and Liabilities
arising from a Single Transaction
Amendment - Lease Liability in a Sale and Leaseback
Amendment - Non-current Liabilities with Covenants
01/01/2023
01/01/2023
01/01/2024
01/01/2024
5 3
ValiRx Plc
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
2. ACCOUNTING POLICIES - continued
The International Financial Reporting Interpretations Committee has also issued interpretations which the
Company does not consider will have a significant impact on the financial statements.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the financial statements in conformity with IFRS requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting period. Although these estimates
are based on management’s best knowledge of the amounts, events or actions, actual results ultimately may
differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the estimate is revised. The material
areas in which estimates, and judgements are applied as follows:
Goodwill and other intangible assets impairment
The Group is required to test, on an annual basis, whether goodwill and other intangible assets have suffered
any impairment. Determining whether there has been any impairment requires an estimation of the value in
use of the cash-generating units. The value in use calculation requires the Directors to estimate the future
cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate
the present value.
Share-based payments
The estimates of share-based payments costs require that management selects an appropriate valuation
model and makes decisions on various inputs into the model, including the volatility of its own share price,
the probable life of the options before exercise, and behavioural consideration of employees. A significant
element of judgement is therefore involved in the calculation of the charge.
Capitalisation of development costs
Capitalisation of development costs requires analysis of the technical feasibility and commercial viability of
the project concerned. Capitalisation of the costs will be made only where there is evidence that an economic
benefit will accrue to the Group. To date no development costs have been capitalised and all costs have been
expensed in the income statement as Research and Development costs.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the statement of financial position
cannot be measured based on quoted prices in active markets, their fair value is measured using valuation
techniques including the Black-Scholes model. The inputs to these models are taken from observable markets
where possible, but where this is not feasible, a degree of judgement is required in establishing fair values.
Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in
assumptions relating to these factors could affect the reported fair value of financial instruments.
See Note 26 for further disclosures.
4. REVENUE
Segmental reporting
The Directors are of the opinion that under IFRS 8 - “operating segment” there are no identifiable business
segments that are subject to risks and returns different to the core business of drug development.
The information reported to the Directors, for the purposes of resource allocation and assessment of
performance is based wholly on the overall activities of the Group. Therefore, the Directors have determined
that there is only one reportable segment under IFRS8.
5 4
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
5. EMPLOYEES AND DIRECTORS
Number of employees:
The average monthly number of employees, including Directors, during the year was:
2022
Number
6
2
8
2022
£
2021
Number
5
3
8
2021
£
496,925
52,169
18,624
10,932
436,396
41,543
12,890
-
578,650
490,829
2022
£
2021
£
950
1,241
3,265
1,307
1,378
80
5,456
2,765
2022
£
2021
£
551,233
216,551
7,717
32,000
(1,533)
539,791
303,789
221,072
7,717
31,000
4,171
184,611
Directors
Staff
Employment costs
Wages and salaries
Social security costs
Other pension costs
Share-based payments
Details of Directors’ remuneration can be found in note 25.
6. FINANCE COSTS
Bank interest
Lease interest
Interest on overdue tax
7. LOSS BEFORE INCOME TAX
After charging:
Research and development
Amortisation - intangible fixed assets
Depreciation - right-of-use assets
Auditors remuneration
Foreign exchange differences
Share-based payment charge
5 5
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
8. INCOME TAX
Domestic current year tax
2022
£
2021
£
Tax credits on research and development - current year
(192,671)
(133,413)
Current tax credit
(192,671)
(133,413)
Factors affecting the tax charge for the year:
Loss before income tax
(2,598,835)
1,680,604
Loss before income tax multiplied by effective rate of
UK corporation tax of 19.00% (2021: 19.00%)
(493,779)
(319,315)
Effects of
Non-deductible expenses
Capital allowances for the year in deficit of depreciation and amortisation
Tax losses not utilised
Research and development expenditure
Current tax charge
700
5,250
378,062
(82,904)
35,467
5,246
202,594
(57,405)
301,108
185,902
(192,671)
(133,413)
No corporation tax arises on the results for the year ended 31 December 2022 due to the losses incurred
for tax purposes.
With effect from 1 April 2023, the main UK corporation rate has changed from 19% to 25%.
The deferred tax asset, arising from tax losses of £24.0 million (2021: £22.0 million) carried forward, has
not been recognised but would become recoverable against future trading profits, subject to agreement
with HM Revenue and Customs.
9. LOSS OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the statement of comprehensive income of
the Parent Company is not presented as part of these financial statements. The Parent Company’s
loss for the financial year was £2,155,958 (2021: £1,315,498).
5 6
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
10.LOSS PER SHARE
The loss and number of shares used in the calculation of loss per ordinary share are set out below:
Loss for the financial period
Non-controlling interest
2022
£
2021
£
(2,406,164)
39,676
(1,547,191)
28,979
Loss attributable to owners of Parent Company
(2,366,488)
(1,518,212)
Basic:
Weighted average number of shares
Loss per share
77,301,896
(3.06p)
65,004,957
(2.34p)
The loss and the weighted average number of shares used for calculating the diluted loss per share
are identical to those for the basic loss per share. The outstanding share options and share warrants
(note 24) would have the effect of reducing the loss per share and would therefore not be dilutive
under IAS 33 ‘Earnings per Share’.
11. GOODWILL
Group
COST
At 1 January 2021
At 31 December 2021
At 31 December 2022
The goodwill arising on the acquisitions of ValiRx Bioinnovation Limited, ValiPharma Limited,
Valisrc Limited and ValiSeek Limited is not being amortised but is reviewed on an annual basis
for impairment, or more frequently if there are indications that goodwill might be impaired.
The impairment review comprises a comparison of the carrying amount of the goodwill with its
recoverable amount (the higher of fair value less costs to sell and value in use). ValiRx Plc has
used the value in use method, applying a 15% discount rate.
Goodwill per cash generating unit
ValiPharma Limited
ValiRx Bioinnovation Limited
Valisrc Limited
ValiSeek Limited
Sensitivity analysis is not required as a reasonably possible change in assumptions
would not result in an impairment.
5 7
£
1,602,522
1,602,522
1,602,522
£
772,230
394,613
-
435,679
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
12. INTANGIBLE ASSETS
Group
COST
Patents
£
Brands and
licences
£
Total
£
At 1 January 2021
2,289,553
375,000
2,664,553
At 31 December 2021
2,289,553
375,000
2,664,553
At 31 December 2022
2,289,553
375,000
2,664,553
AMORTISATION
At 1 January 2021
Amortisation for year
At 31 December 2021
Amortisation for year
1,154,691
183,622
180,674
37,450
1,335,365
221,072
1,338,313
174,215
218,124
30,001
1,556,437
204,216
At 31 December 2022
1,512,528
248,125
1,760,753
NET BOOK VALUE
At 31 December 2022
777,025
126,875
903,900
At 31 December 2021
951,240
156,876
1,108,116
Company
COST
At 1 January 2021
At 31 December 2021
31 December 2022
AMORTISATION
At 1 January 2021
Amortisation for year
At 31 December 2021
Amortisation for year
At 31 December 2022
NET BOOK VALUE
At 31 December 2022
At 31 December 2021
Brands and
licences
£
Total
£
200,000
200,000
200,000
200,000
200,000
200,000
120,000
20,000
120,000
20,000
140,000
20,000
140,000
20,000
160,000
160,000
40,000
40,000
60,000
60,000
5 8
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
13. PROPERTY, PLANT AND EQUIPMENT
Group and Company
COST
At 1 January 2021
AT 31 December 2021
At 31 December 2022
DEPRECIATION
At 1 January 2021
AT 31 December 2021
At 31 December 2022
NET BOOK VALUE
At 31 December 2022
At 31 December 2021
Plant and
machinery
£
31,670
31,670
31,670
31,670
31,670
31,670
Total
£
31,670
31,670
31,670
31,670
31,670
31,670
-
-
-
-
5 9
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
14.INVESTMENTS
Company
COST
At 1 January 2021
At 31 December 2021
Additions
At 31 December 2022
PROVISIONS
At 1 January 2021
Charge for the year
At 31 December 2021
At 31 December 2022
NET BOOK VALUE
At 31 December 2022
At 31 December 2021
Shares in group
undertakings
£
Total
£
3,617,838
3,617,838
3,617,838
6
3,617,838
6
3,617,844
3,617,844
-
1,975
-
1,975
1,975
1,975
1,975
1,975
3,615,869
3,615,869
3,615,863
3,615,863
The Company’s investments at the Statement of Financial Position
date in the share capital of companies include the following:
Subsidiaries
ValiRx Bioinnovation Limited
Registered office: England & Wales
Nature of business: Intermediate holding company
Class of shares:
Ordinary shares
% Holding
100.00
6 0
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
14.INVESTMENTS - continued
Subsidiaries
ValiPharma Limited
Registered office: England & Wales
Nature of business: Therapeutic research & development
Class of shares:
Ordinary shares
60.28% is owned by ValiRx Bioinnovation Limited and 39.72% by the Company.
Valisrc Limited
Registered office: England & Wales
Nature of business: Dormant
Class of shares:
Ordinary shares
ValiSeek Limited
Registered office: England & Wales
Nature of business: Therapeutic research & development
Class of shares:
Ordinary shares
Cytolytix Limited
Registered office: England & Wales
Nature of business: Therapeutic research & development
Class of shares:
Ordinary shares
% Holding
100.00
% Holding
100.00
% Holding
55.55
% Holding
60.00
15. TRADE AND OTHER RECEIVABLES
GROUP & COMPANY
Current
2022
£
2021
£
2022
£
2021
£
Amounts owed by Group undertakings
Other debtors
Rent deposit
VAT
Prepayments and accrued income
-
14,709
1,500
56,087
61,519
-
26,714
1,500
5,303
39,408
3,286,875
50,315
1,500
55,626
61,519
3,230,321
26,642
1,500
29,545
39,408
133,815
72,925
3,455,835
3,327,416
In the Directors’ opinion, the carrying amounts of receivables is considered a reasonable approximation
of fair value.
16. CASH AND CASH EQUIVALENTS
GROUP & COMPANY
2022
£
2021
£
2022
£
2021
£
Bank accounts
1,137,477
593,672
1,134,289
592,046
6 1
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
17. CALLED UP SHARE CAPITAL
GROUP & COMPANY
Allotted, called up and fully paid
Ordinary shares of 0.1p each
Deferred shares of 0.5p each
Deferred shares of 0.9p each
Deferred shares of 12.4p each
2022
Number
2021
Number
2022
£
2021
£
90,174,156
58,378,365
157,945,030
42,455,832
65,049,156
58,378,365
157,945,030
42,455,832
90,174
2,918,918
1,421,505
5,264,523
65,049
2,918,918
1,421,505
5,264,523
9,695,120
9,669,995
In July 2022, the Company raised £2.5 million, before expenses, through the issue of 25,000,000 new ordinary
shares at a price of 10 pence per share. The funds were to be used to provide working capital to the Group.
In July 2022, the Company settled existing liabilities of £12,500 through the issue of 125,000 new ordinary shares
at a price of 10 pence per share.
The deferred shares have no rights to vote, attend or speak at general meetings of the Company or to receive any
dividend or other distribution and have limited rights to participate in any return of capital on a winding-up or
liquidation of the Company.
18. TRADE AND OTHER PAYABLES
GROUP & COMPANY
Current
2022
£
2021
£
2022
£
2021
£
Trade creditors
Amounts owed to Group undertakings
Social security and other taxes
Other payables
Accruals and deferred income
24,955
-
17,603
2,905
66,470
13,056
-
4,887
2,892
30,000
24,955
447,187
17,603
-
66,470
13,056
447,187
4,887
-
30,000
111,933
50,835
556,215
495,130
In the Directors’ opinion, the carrying amounts of payables is considered a reasonable approximation of
fair value.
19. FINANCIAL LIABILITIES - BORROWINGS
GROUP & COMPANY
Current:
Bank loan
Non-current:
Bank loan:
1-2 years
2-5 years
2022
£
2021
£
2022
£
9,962
9,627
9,962
2021
£
9,627
9,962
9,627
9,962
9,627
GROUP & COMPANY
2022
£
2021
£
2022
£
2021
£
10,213
11,857
9,871
25,783
10,213
11,857
9,871
25,783
22,070
35,654
22,070
35,654
6 2
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
19. FINANCIAL LIABILITIES - BORROWINGS - continued
Total bank loan
Current
Non-current
20.LEASES
Right-of-use assets
Group and Company
COST
At 1 January 2021
GROUP & COMPANY
2022
£
2021
£
2022
£
2021
£
9,962
22,070
9,627
35,654
9,962
22,070
9,627
35,654
32,032
45,281
32,032
45,281
Leasehold
property
£
23,152
Total
£
23,152
At 31 December 2021 and 2022
23,152
23,152
AMORTISATION
At 1 January 2021
Amortisation for year
At 31 December 2021
Amortisation for year
2,157
7,717
2,157
7,717
9,874
9,874
7,717
7,717
At 31 December 2022
17,591
17,591
NET BOOK VALUE
At 31 December 2022
At 31 December 2021
Lease liabilities
Group and Company
Set out below is the movement in lease liabilities during the period.
At 1 January 2021
Interest expense
Repayments
At 31 December 2021
Interest expense
Repayments
At 31 December 2022
6 3
5,561
5,561
13,278
13,278
21,061
1,378
(9,000)
13,439
1,241
(9,000)
5,680
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
20.LEASES - continued
Group and Company
Current
Non-current
Non-current
Lease liability
1-2 years
2022
£
2021
£
5,680
-
7,758
5,681
5,680
13,439
-
5,681
-
5,681
21. OTHER FINANCIAL COMMITMENTS
As a result of the adoption of IFRS 16, from 1 July 2019, all leases, except those classified as either
low-value assets or short-term, have been recognised on the balance sheet as a right-of-use asset
and lease liability and are no longer included in this non-cancellable operating lease disclosure.
At the year end, neither the Group nor the Company had any non-cancellable operating leases
22.RELATED PARTY DISCLOSURES
During the year the Director, G Desler, provided the Company and its subsidiaries with bookkeeping
services totalling £18,450 (2021: £18,450).
At the year end, the amounts owed to Directors were as follows:
K Alexander (resigned 30/06/2022)
G Desler
M Lampshire
Dr S Dilly
Dr K Cox
S Panu (appointed 11/10/2022)
23. ULTIMATE CONTROLLING PARTY
The Directors consider that there is no ultimate controlling party.
2022
£
2021
£
-
26
-
2,879
-
-
-
-
-
2,879
-
-
6 4
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
24.SHARE-BASED PAYMENT TRANSACTIONS
Share option
At 31 December 2022 outstanding awards to subscribe for ordinary shares of 0.1p each in the Company,
granted in accordance with the rules of the ValiRx share option schemes, were as follows:
2021
Number of
shares
Weighted average
remaining contractual
life (years)
Weighted average
exercise price (pence)
Brought forward
Lapsed during the year
74,884
(1,120)
6.60
-
1,474.44
11,718.75
Carried forward
73,764
5.60
1,318.89
2022
Number of
shares
Weighted average
remaining contractual
life (years)
Weighted average
exercise price (pence)
Brought forward
Granted during the year
Lapsed during the year
73,764
3,000,000
(4,400)
5.60
-
-
1,318.89
12.00
500.00
Carried forward
3,069,364
9.58
42.71
All options were exercisable at the year end, with the following exceptions. No options were exercised during the year.
Option 6: Vest only after the Company’s share price has maintained a 20-day VWAP (Volume Weight Average Price) of 25p.
Options 7 and 9: Vest only after the Company’s share price has maintained a 20-day VWAP of 30p.
Options 8 and 10: Vest only after the Company’s share price has maintained a 20-day VWAP of 40p.
If the price does not reach these price targets by 6 September 2024, the options will lapse. If they meet the criteria, the
options can be exercised at any date to 6 September 2032.
The following share-based payment arrangements were in existence at the balance sheet date.
Options
1 Granted 19 January 2014
2 Granted 21 October 2014
3 Granted 26 June 2015
4 Granted 9 February 2018
5 Granted 6 September 2022
6 Granted 6 September 2022
7 Granted 6 September 2022
8 Granted 6 September 2022
9 Granted 11 October 2022
10 Granted 11 October 2022
Number
3,392
4,032
3,940
58,000
500,000
375,000
800,000
1,175,000
75,000
75,000
Expiry
date
Exercise
price
Fair value at
grant date
19/01/2024
21/10/2024
26/06/2025
09/02/2028
06/09/2032
06/09/2032
06/09/2032
06/09/2032
11/10/2032
11/10/2032
5,391.25p
5,625.00p
6,375.00p
500.00p
12.00p
12.00p
12.00p
12.00p
12.00p
12.00p
625.00p
468.75p
505.00p
348.75p
10.74p
7.38p
5.37p
0.61p
6.15p
0.77p
6 5
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
24.SHARE-BASED PAYMENT TRANSACTIONS - continued
The fair value of the remaining share options has been calculated using the Black-Scholes model. The assumptions
used in the calculation of the fair value of the share options outstanding during the year are as follows:
Options
Grant date
share price
Exercise
price
Expected
volatility
1 Granted 19 January 2014
2 Granted 21 October 2014
3 Granted 26 June 2015
4 Granted 9 February 2018
5 Granted 6 September 2022
6 Granted 6 September 2022
7 Granted 6 September 2022
8 Granted 6 September 2022
9 Granted 11 October 2022
10 Granted 11 October 2022
5,391.25p
5,625.00p
6,312.50p
500.00p
13.75p
13.75p
13.75p
13.75p
15.75p
15.75p
5,391.25p
5,625.00p
6,375.00p
500.00p
12.00p
12.00p
12.00p
12.00p
12.00p
12.00p
17.00%
17.00%
16.00%
196.00%
234.47%
234.47%
234.47%
234.47%
234.75%
234.75%
Expected
option life
(years)
3.00
3.00
3.00
3.00
2.00
2.00
2.00
2.00
2.00
2.00
Risk-free
interest rate
0.99%
1.00%
0.38%
0.88%
3.11%
3.11%
3.11%
3.11%
4.64%
4.64%
The fair value has been calculated assuming that there will be no dividend yield.
Volatility was determined by reference to the standard deviation of expected share price returns based on a statistical
analysis of daily share prices over a 3-year period to grant date. All of the above options are equity settled.
All of the share options are equity settled and the charge for the year is £66,725 (2021: £nil).
Warrants
At 31 December 2022 outstanding warrants to subscribe for ordinary shares of 0.1p each in the Company,
granted in accordance with the warrant instruments issued by ValiRx, were as follows.
2021
Number of
shares
Weighted average
remaining contractual
life (years)
Weighted average
exercise price (pence)
Brought forward
Granted during the year
Exercised during the year
Lapsed during the year
695,223
3,902,949
(166,666)
(461,891)
0.59
-
-
-
507.01
22.00
13.00
747.62
Carried forward
3,969,615
4.57
22.89
2022
Number of
shares
Weighted average
remaining contractual
life (years)
Weighted average
exercise price (pence)
Brought forward
Lapsed during the year
3,969,615
(66,666)
4.57
-
22.89
75.00
Carried forward
3,902,949
3.65
22.00
All warrants were exercisable at the year end.
6 6
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
24.SHARE-BASED PAYMENT TRANSACTIONS - continued
The following warrants were in existence at the balance sheet date.
Warrants
Number
Expiry
date
Exercise
price
Fair value at
grant date
1 Granted 25 August 2021
3,902,949
24/08/2026
22.00p
16.85p
Warrants
The fair value of the remaining warrants has been calculated using the Black-Scholes model. The assumptions used
in the calculation of the fair value of the share options outstanding during the year are as follows:
Warrants
Grant date
share price
Exercise
price
Expected
volatility
Expected
warrant
life (years)
Risk-free
interest rate
1 Granted 25 August 2021
21.25p
22.00p
521.50%
3.00
0.33%
The fair value has been calculated assuming that there will be no dividend yield.
Volatility was determined by reference to the standard deviation of expected share price returns based on a statistical
analysis of daily share prices over a 3-year period to grant date.
The remaining warrants are equity settled and the charge for the year is £473,066 (2021: £184,611).
6 7
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
25.KEY MANAGEMENT PERSONNEL COMPENSATION
Key management personnel are those persons having authority and responsibility for planning,
directing and controlling activities of the Group, and are all Directors of the Company.
Salaries and other short-term employee benefits
Post-employment benefits
Share-based payments
2022
£
2021
£
319,420
9,600
6,858
286,875
9,183
-
335,878
296,058
l
e
m
p
o
y
m
e
n
t
b
e
n
e
fi
t
s
P
o
s
t
-
£
p
a
y
m
e
n
t
b
a
s
e
d
S
h
a
r
e
-
£
Salary
£
Bonus
£
2022
£
2021
£
G Desler
M Lampshire
Dr S Dilly
Dr K Cox
S Panu (appointed 11/10/22)
K Alexander (resigned 30/06/22)
48,000
25,000
126,250
45,000
9,658
12,812
5,000
5,200
25,000
17,500
-
-
-
-
9,600
-
-
-
873
655
2,619
2,183
528
-
53,873
30,855
163,469
64,683
10,186
12,812
48,000
25,000
159,183
38,250
-
25,625
266,720
52,700
9,600
6,858
335,878
296,058
Details of fees paid to Directors are shown in note 22 above.
The number of Directors for whom retirement benefits are accruing under money purchase pension schemes
amounted to 1 (2021: 1).
6 8
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
25.KEY MANAGEMENT PERSONNEL COMPENSATION - continued
The Directors interests in share options as at 31 December 2022 are as follows:
G Desler
G Desler
G Desler
G Desler
G Desler
G Desler
Dr S Dilly
Dr S Dilly
Dr S Dilly
Dr S Dilly
Dr S Dilly
Number of
options
Exercise
price
Date of
grant
First date of
exercise
Final date of
exercise
1,280
1,280
1,390
20,000
100,000
100,000
223,950
512
240
4,000
300,000
300,000
604,752
5,390.63p
5,625.00p
6,375.00p
500.00p
12.00p
12.00p
19/01/2014
21/10/2014
26/06/2015
07/02/2018
06/09/2022
06/09/2022
19/01/2014
21/10/2014
26/06/2015
07/02/2018
Note 1
Note 2
19/01/2024
21/10/2024
25/06/2025
07/02/2028
06/09/2032
06/09/2032
5,625.00p
6,375.00p
500.00p
12.00p
12.00p
21/10/2014
07/02/2018
07/02/2018
06/09/2022
06/09/2022
21/10/2014
07/02/2018
07/02/2018
Note 1
Note 2
21/10/2024
07/02/2028
07/02/2028
06/09/2032
06/09/2032
Dr K Cox
Dr K Cox
250,000
250,000
12.00p
12.00p
06/09/2022
06/09/2022
Note 1
Note 2
06/09/2032
06/09/2032
500,000
M Lampshire
M Lampshire
75,000
75,000
12.00p
12.00p
06/09/2022
06/09/2022
Note 1
Note 2
06/09/2032
06/09/2032
150,000
S Panu
S Panu
75,000
75,000
12.00p
12.00p
11/10/2022
11/10/2022
Note 1
Note 2
11/10/2032
11/10/2032
150,000
Note 1: Vest only after the Company’s share price has maintained a 20-day VWAP (Volume Weight Average Price) of 30p.
Note 2: Vest only after the Company’s share price has maintained a 20-day VWAP of 40p.
If the price does not reach these price targets by 6 September 2024, the options will lapse.
If they meet the criteria, the options can be exercised at any date to 6 September 2032.
6 9
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
26.FINANCIAL INSTRUMENTS
The principal financial instruments used by the Group, from which financial instrument risk arises are
as follows:
• derivative financial assets;
• trade and other receivables;
• cash and cash equivalents; and
• trade and other payables.
The main purpose of these financial instruments is to finance the Group’s operations.
Financial assets
Loans and receivables
Trade and other receivables
Cash and cash equivalents
Total loans and receivables
Total financial assets
Financial liabilities
Trade and other payables
Cash and cash equivalents
Lease liabilities
Total financial liabilities
2022
£
2021
£
133,815
1,137,477
72,925
593,672
1,271,292
666,597
1,271,292
666,597
2022
£
2021
£
94,330
32,032
5,680
45,948
45,281
13,439
132,042
104,668
7 0
ValiRx Plc
CONNECTED INNOVATION
Notes to the Consolidated Financial Statements - continued
for the year ended 31 December 2022
26.FINANCIAL INSTRUMENTS - continued
The Directors consider that the carrying value for each class of financial asset and liability, approximates to
their fair value.
Financial risk management
The Group’s activities expose it to a variety of risks, including market risk (foreign currency risk and interest
rate risk), credit risk and liquidity risk. The Group manages these risks through an effective risk management
programme, and, through this programme, the Board seeks to minimise potential adverse effects on the
Group’s financial performance.
The Board provides written objectives, policies and procedures with regards to managing currency and
interest risk exposures, liquidity and credit risk including guidance on the use of certain derivative and
non-derivative financial instruments.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations. The Group’s credit risk is primarily attributable to its receivables and its
cash deposits. It is Group policy to assess the credit risk of new customers before entering contracts.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings
assigned by international credit-rating agencies. The maximum exposure is the asset recognised.
Liquidity risk and interest rate risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter
difficulty in meeting its financial obligations as they fall due. The Board regularly receives cash flow projections
for a minimum period of twelve months, together with information regarding cash balances monthly.
The Group is principally funded by equity and invests in short-term deposits, having access to these funds at
short notice. The Group’s policy throughout the period has been to minimise interest rate risk by placing funds
in risk free cash deposits but also to maximise the return on funds placed on deposit.
All cash deposits attract a floating rate of interest. The benchmark rate for determining interest receivable
and floating rate assets is linked to the UK base rate.
Foreign currency risk
The Group’s exposure to foreign currency risk is limited as most of its invoicing and payments are denominated
in Sterling. Accordingly, no sensitivity analysis is presented in this area as it is considered immaterial.
27.POST BALANCE SHEET EVENTS
In January 2023, the Company raised £1.336 million before expenses by way of a placing of 12,145,454
new ordinary shares of £0.001 each in the Company at a price of 11 pence per share.
In addition, each subscriber was issued a warrant to subscribe for 1 new ordinary share for every 4 new
ordinary shares purchased at a price of 14 pence per share. These warrants are exercisable from
6 February 2023 until 6 February 2026.
In March 2023, the Company announced the incorporation of a new wholly owned subsidiary,
Inaphaea Biolabs Limited (“Inaphaea”). Inaphaea is headquartered in the Company’s laboratory in Medicity,
Nottingham, and offers a wide range of pre-clinical and drug discovery testing services to academic, biotech
and pharmaceutical researchers. A significant proportion of the testing for Valirx’s evaluation pipeline,
currently outsourced to Contact Research Organisations will be transferred to Inaphaea.
7 1
ValiRx Plc
Eliot Park Innovation Centre
4 Barling Way Nuneaton,
CV10 7RH UK
Tel: +44 (0)2476 796496
Email: info@valirx.com
www.valirx.com